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| Jumping into mobile music |
July 6, 2006 |
By Paul Lima
You want to listen to a particular song right this minute. Mobile carriers hear opportunity knocking
The cellphone beside me rang and I looked over at the owner. The tune was the Iron Butterfly classic In-A-Gadda-Da-Vida.
I asked how he got his cellphone to ring that way. “Easy,” he said. “I downloaded the ring tone.”
He offered to show me how. After about 10 minutes of squinting at fuzzy menus on his phone display, the download of Led Zeppelin’s Stairway to Heaven ring tone began. Halfway through the sluggish download, his phone dropped the connection and we had to go through the entire tedious process again.
“For this privilege, you pay how much?” I asked.
But that was a while ago. Now, it turns out ring tones are just the tip of the wireless download iceberg. Wireless music and multimedia downloads enjoy nowhere near the penetration rate of wireless text messaging and e-mail, nor do they rival downloads to PCs, but they do represent a growing wave of consumer interest. Along with that comes growing revenue for the cellphone and mobile content companies.
“Any digital service beyond voice is going to be a growing part of the business for wireless carriers,” said Tony Olvet, vice-president of communications practice with IDC Canada. In Canada, non-voice services, including music downloads, accounted for $672 million in revenue in 2005. This will grow to $1.1 billion in 2006 and to $2.43 billion by 2009, according to IDC.
Canadians have embraced mobile video, having watched more than one million shows since mobile video on demand was made available about two years ago. In March, Canadians viewed more than 7,000 hours of content???—???or more than 290 hours of mobile video a day, up more than 1,000 per cent from six months ago, said Raja Khanna, chief creative officer and co-founder of QuickPlay Media, a mobile media company that delivers interactive multimedia to mobile devices. Its clients include Canada’s wireless carriers and media companies such as ESPN, VH1 and MTV. Its most popular shows include NHL highlights, movie trailers, music videos and comedy.
“Mobile phones are no longer used solely for placing and receiving calls,” Khanna said. “The mobile phone is a converged media device capable of delivering several forms of media and entertainment with the simple click of a button.”
Apple shares still safe
Still, Olvet said e-mail and text messages form the bulk of non-voice mobile services; music accounts for very few downloads, but it is growing. Currently, one in 75 cellphones in Canada is used for music, multimedia and entertainment. In the U.S. that number is one in 70. In 2005, 1.8 million Americans downloaded full-track wireless music. That figure will grow to 12.5 million this year.
“We are seeing the supply-side push from the carriers to tap into the success of iPods and iTunes,” Olvet said. “Wireless music downloads are convenient. You don’t have to plug an iPod into a computer. Instead, you can use the utility in the mobile device.” However, he doesn’t expect people who have iPods and MP3 players to immediately abandon their investment in portable music players for cellphones that play music. Music phones tend to hold fewer tunes and offer “an inferior music experience,” he said.
“How many people who have iPods will gravitate to a cellphone and how many current cellphone users will buy phones that let them listen to music? Those issues are big inhibitors.”
Notwithstanding his caveat, the downloading of music to cellphones is a growing phenomenon. “The big wave will come over time. There will be incentives from the carriers to make it happen,” Olvet said.
The cell top five
There are five reasons downloading music to cellphones is catching on, according to industry experts. They include:
1 High-speed wireless networks: Ring tones now download in seconds; full tunes download in less than a minute.
2 Cost: Mobile phone carriers are following the iTunes model and offering flat-rate per-tune charges.
3 Handsets: All carriers offer several cellphones that can play music uploaded from a PC, and they all have at least one that can download tunes.
4 Convenience: You hear a tune, you like the tune, you buy and download the tune. No waiting to download it to your PC and then transfer it to your portable music player.
5 Demographics: Most downloaders are teens who have grown up with access to the Internet, portable music devices and cellphones. To them, music downloading is not a new phenomenon, it’s a way of life.
“The biggest reason is convenience. You are no longer tethered to your computer,” said Scott Kepron, Bell Mobility associate director of wireless data business development. “When you leave the house, you take your keys, wallet or purse, and your cellphone. If you have a few minutes to kill, you can listen to music on your handset. If you are out and hear a tune you like, you can buy it immediately.”
People are used to this, Kepron said. They are already downloading games, images, ring tones and multimedia clips to the handset. “Now music—full tunes—has moved into that domain."
Upinder Saini, Rogers Communications vice-president of new services marketing, concurred. “Starting with ring tones, Rogers has been supplying music to mobile handsets for over three years.” He sees full track downloads over the Rogers high-speed mobile network as a logical extension of that. “The world is moving towards mobile, in any content category. Downloads are traditionally done on the PC but mobility is becoming more common and more critical than PC, and people want their freedom.”
While the number of phones that can be used to download tunes is limited?—?Rogers has two?—?Saini said more download-capable phones are coming on-stream.
When the phone is all
“The population is more mobile and consumers want infinite choice,” said Chris Langdon, Telus vice-president of wireless solutions. To deliver choice, the cellular phone is becoming a converged entertainment device?—?a mobile phone, portable music player and video player. Plus it can be used to access the wireless Web and to send and receive text messages and e-mail.
In addition to music, Telus offers consumers news, weather, sports and entertainment updates, trivia and other games, and 10 broadcast TV channels with streaming video, including programs available on the handset at the same time they hit the television screen.
“Who needs to go home?” Langdon said.
In another bid to get consumers hooked on mobile downloads, a woman at a club or guy at home can hold the LG 8100 mobile handset from Telus to a speaker and the phone will try to identify the song. The title and artist will appear on the phone’s screen and, if the phone guessed right, the tune can be downloaded to the phone. Langdon admits the system is not 100 per cent accurate, but he said it’s an example of the functionality now available in some handsets.
No doubt these options will expand in the future, but even now the marketing message is clear: if it’s digital it can be mobile too.
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