As discussed in Part One, the illegal downloading of music off the Internet has been draining the music industry of its profits. However, wireless has opened up a whole new world of possibilities that will enable the industry to once again provide music content but this time on handsets and for a fee. Music companies such as Warner Music Group and music broadcasters including MTV are quickly adopting wireless as a way to deliver music content to consumers as well as boost the music industry. Yet, these aren’t the only companies getting in on the action.
AOL Music Mobile Club
America Online, Inc. (AOL), a media and entertainment company, quickly identified the possibilities wireless offers in connecting with music fans and launched the AOL Music Mobile Club on March 3, 2003. The club is available to AT&T Wireless’s approximately 21 million subscribers who also have mMode, a service that provides access to the Internet.
Conducting research and surveys, AOL asked its members what they would be most interested in from a mobile perspective and, from the responses received, conceived a list of services. The AOL Music Mobile Club entitles members to receive three complimentary ring tones or phone graphic downloads each month, access music samples, receive weekly alerts regarding new featured artists and offerings, participate in weekly quizzes on different artists, and access information about new, up-and-coming bands through the Artist Discovery Network element of the club.
According to Dan Servos, vice president of Premium Mobile Services for AOL, the services currently offered are just phase one. Phase two promises to offer members an even more elaborate music experience, such as the ability to download full MP3 music tracks to their mobile phones.
“There’s a whole array of rich features we’re going to be bringing to the service,” Servos says. “It’s going to continue to build on this whole theme of getting the hottest and richest music content to your phones.”
For AOL, it’s an ideal opportunity to extend its service and its brand into the mobile arena. “Extending our brand from the desktop into the mobile space is a natural evolution for us,” Servos says. By offering music content, the company is able to enhance its services already available through the majority of wireless carriers in the United States such as its instant messaging service, which has grown substantially over the last four to five months, according to Servos.
“When you’re getting that consistent week-to-week, month-to-month growth that is in the triple digit numbers, you have to believe that the United States’ population is finally starting to embrace data services and are starting to explore and use entertaining-type applications like being able to download ring tones, graphics, games and listen to their favorite music artists,” he says. “So we believe that, in the United States’ market, the data service market is starting to take off.”
The company is extremely pleased with the response it already has received in regards to its music mobile club. Servos says the number of subscriptions for the music club was already exceeding the company’s expectations by 200% within the first week following the launch.
“If we continue on this path, this could become extremely popular in terms of the entire membership,” he says. “We’re going to continue to market [the AOL Music Mobile Club], promote it and continue to build out the richness of the service.”
AT&T Wireless is equally optimistic about this new service as well as music content in general. In addition to the AOL Music Mobile Club, the carrier offers services such as NowPlaying, which enables subscribers to access the names and artists of songs played on the radio as well as MusicCall, a service through which subscribers are able to send song clips with a personalized message to any phone including land-lines.
“Music is definitely one of our most popular sites or channels that is visited by our customers,” says Danielle Perry, a spokesperson for AT&T Wireless. “Music transcends all generations. It’s a great application for the mobile environment.”
Accessories and Phones Unveiled
To further increase the hype around the delivery of music content over mobile phones, mobile communication companies and carriers are revealing new and advanced accessories that will enable music fans to access even more music content from their mobile phones.
Sony Ericsson revealed the HBM-30 early last month. A small-sized digital audio player for MP3 and ATRAC3, the device is capable of being connected to any mobile phone equipped with Bluetooth, and, in this way, serves as a hands-free device. During an incoming call, the device will automatically mute the music as well as display the name of the caller.
Nokia just launched its new 3300, a mobile phone that is combined with an MP3 player and an FM stereo radio. A USB cable is provided, allowing music to be transferred from a computer to the mobile phone. Also, a multi-media memory card is included, allowing the storage of music.
Meanwhile, mm02, a European carrier, will soon be offering a “music over mobile” service, allowing subscribers to use a digital music player in conjunction with their GPRS handsets. Subscribers can use the player to download free of charge 30-second previews of tracks chosen from a menu or for a fee they can download entire songs.
Though these devices will most likely help to further advance the use of mobile phones for music content, consumers – especially American ones – will have to be patient as the HBM-30 is not scheduled to enter the market until the second half of 2003, Nokia’s 3300 won’t be available until the end of the summer, and the “music over mobile” service will only begin testing the product in the United Kingdom and Germany starting in May.
Decreasing Music Piracy
For the music industry, wireless is appealing as mobile phones offer direct and easy access to music fans. Equally important and attractive though is that it is a medium that allows for more control over securing profits for the music industry and enforcing digital rights management. Servos says one aspect of wireless that publishing companies and labels are most excited about is being able to monetize music, something they have not been able to accomplish with the Internet.
“Wireless from day one has been more of a commerce-based service,” Servos says. “There has been a lot of thought that has gone in right from the handset manufacturer, straight through to the carrier to insure that digital rights management, which is key here, is contemplated in the design development of handsets, applications and content.”
Michael Nash, Warner Music Group’s senior vice-president, Internet strategy and business development agrees and says wireless avoids a barrier common to online digital music consumption and may assist with decreasing piracy problems.
“You can’t buy [music online] without a credit card and most teenagers don’t have a credit card so it’s hard to encourage the market to move in the direction of legitimate content distribution,” he says.
In addition, by keeping prices low and maintaining the quality of the content, Nash hopes that piracy will be deterred. “What we want to do is make a high quality official content that can’t come from any place other than the artist available in the marketplace at a very reasonable price. We want to make ring tones available right when singles are going to radio; we want our official ring tone to be there first; we want it to be cheap for the consumer,” he says. “You have to play some defense here, but I think the key is to play some offense – come up with a really good offer for the consumer.”
While measures are being taken to maintain the stability of the music industry and prevent piracy within the wireless medium, one thing remains certain: For the moment, the music and wireless industries have formed a harmonious relationship that signifies profits for music companies, music broadcasters and media and entertainment companies while continuously providing mobile phone subscribers with alluring content.
