@ CES: On Music: The Only New Money Is In Mobile; Execs Not Impressed With iTunes’ New 3G Downloads

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imageDuring an hour-long panel at the CES Mobile Entertainment event today, a host of executives ranging from Pandora to *SanDisk* and *Motorola* to *Sony* *Ericsson* talked about the mobile music industry with a couple of themes standing out: thoughts on the news yesterday that iTunes will allow full-track music downloads over-the-air for the same price, and whether negotiations with music labels, which can always be tricky, are finally starting to loosen up. The backdrop can be put into context with some numbers Atlantic Records shared earlier in the day. Livia Tortella, GM/ESVP of marketing for Atlantic Records, said that Atlantic was one of the first to achieve a 50-50 split between physical and digital music sales, and of the 50 percent going towards digital, she said the mix breaks down to 69 percent from downloads, 18 percent from subscription, and about 13 percent from mobile.

On music-label negotiations “being like a colonoscopy”: David Thompson, head of content acquisition for Sony (NYSE: SNE) Ericsson: “The labels are realizing that digital is what matters, and since online is saturated, the only new money is in mobile. The labels are much more willing to come to the table and negotiate.” Following the panel, I asked Thompson to explain: “It [mobile] is the new hot spot for them. They’ve done well with Comes With Music from our competitors, like Nokia (NYSE: NOK), and therefore their digital divisions are getting more freedom and attention internally…it is still a tough negotiation on both sides.” Dave Ulmer, senior director, of Motorola’s Entertainment and Multimedia Products & Services, said: “It

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Jamie Poitra

I'm not surprised none of the carriers are "impressed" with the iTunes over the cell network thing. They don't get a piece of it.

Except that actually they do. We pay for the unlimited internet access that allows for it. It's not like that bit is free. The carriers aren't used to being seen as nothing more than a connection to the internet. They've (at least in the US) been much more than that up till now.

But things are obviously changing whether the carriers are perfectly pleased about it or not.

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