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Music downloads may have taken a backseat to streaming services like Spotify in the buzz stakes, but with iTunes still driving more music sales than the rest of the digital music industry put together, they are far from being out of the picture. Today saw 7digital, the UK-based download service that sells itself as being an iTunes alternative, grab some more land in its bid for growth, announcing a new Windows Phone app and the expansion of its U.S. operation.
The Windows Phone app, which will officially come out next year, will see 7digital offer its 17 million-plus music store via the Windows Phone Marketplace app storefront. It will work on the full range of smartphones running the latest version of the OS (7.5 “Mango”), including the new range of Nokia (NYSE: NOK) Lumia devices, and allows users to browse, sample, buy and download their music directly to their devices.
With Microsoft (NSDQ: MSFT) and Nokia already offering their own music services, it will be interesting to see whether 7digital can gain much traction on those devices. On other platforms like Android (which recently also launched an optimized tablet version) and BlackBerry, 7digital had more clean sailing, in that there were no obvious incumbent music services that would steal its wind.
But Ben Drury, the CEO of 7digital, tells me that part of the idea of launching on Windows Phone is not just to pick up new users on those devices, but to offer existing users a route to continuing to use the service when and if they make the switch to a new platform, such as a Windows Phone device.
Services with that kind of device flexibility in mind are a refreshing thing to hear in the context of all the ecosystem “lock-in” that Samsung and Apple (NSDQ: AAPL) are fighting over in courtrooms from Australia to Washington.
Indeed, while Apple has honed iTunes as a service very specific to its own devices, 7digital has taken a significantly different approach, with not only apps for multiple platforms, but the promotion of its API to as wide a range of third parties as possible. The list not only includes stereo makers like the UK-based Pure, operators like T-Mobile and mobile giant Samsung, which offers a 7digital-powered music service on bada feature phones as well as its smartphone and tablet lines. At the moment, the Samsung and T-Mobile partnerships are bringing in the most business and traffic to the service.
Given deals like Samsung’s, it’s no surprise to hear that devices like mobile phones have become a significant part of 7digital’s business. Drury, during a presentation earlier this evening in London, noted that mobile devices account for 44 percent of all music sales for the company, compared to only one percent of all sales a year ago. (Music bought via PCs account for the remainder in both cases.)
With the Windows Phone app coming out in the early part of next year, that will mean that 7digital is available on all the major smartphone and tablet platforms in a native format — all except Apple’s iOS, that is.
It’s not for lack of trying: 7digital is currently trying to get an App Store app approved, after having it rejected for unexplained reasons.
7digital has been using a workaround, however…
iOS users can access the service via their browsers. The main issue there is that they have to keep their music in their cloud-based lockers rather than having an option to download it; Apple’s terms do not allow for music downloads to its devices through services other than iTunes, and although Apple did not spell out to 7digital why it had rejected its first app for the App Store, one 7digital engineer I spoke to today told me he thought the download element may have been part of the reason.
The other, of course, could be the obvious direct competition that 7digital poses to iTunes.
Perhaps predictably for a competitor, Drury said he thought that iTunes had reached its peak of penetration. In the UK, iTunes currently accounts for 80 percent of all downloads of albums, and 85 percent of all single tracks, but Drury believes that proportion will inevitably start to go down with the adoption of new devices for consuming music — for example, phones built on the all-popular Android platform — at the expense of buying standalone music players like the iPod, which had effectively cornered the market for digital music, via iTunes, before other devices and other stores could get a look in.
Fast foward to today, and amidst the many other places outside of iTunes to listen to and buy digital music — they include streaming sites like Pandora, Spotify and Deezer, as well as Sony’s Music Unlimited, and even the recently launched Google Music — 7digital hopes to be one of the contenders.
To be sure, 7digital is growing — three million registered users, adding 100,000 in the month of November, and averaging a rate of about 30 percent active users — but it’s still more than a stones throw from the numbers being generated by iTunes, which saw its 16th billionth song downloaded in October 2011 and this summer reported 225 million iTunes accounts with credit card numbers on file.
That’s where the company, which is 50 percent owned by UK music and digital entertainment retailer HMV, hopes that the U.S. will come in handy. 7digital has been operating in the country since 2009, when it started to acquire song rights in the country; now it will be looking to beef up that presence even more, promoting Vickie Nauman into the position of president of 7digital North America.
Among her responsibilities will be expanding that list of partnerships and marketing as well as overseeing label relations. With plans for extending services beyond music and further into e-books, video and other digital media, will be interesting to see, as 7digital digs deeper into the U.S. market, if we start to see new elements popular with the local crowd — such as streaming or even an iTunes-Match style service — find their way into the main product, too.