Mobile Music - Giving Vendors New Hope
By Niall McKay, Mon Nov 18 12:00:00 GMT 2002
Following its acrimonious divorce with the Internet (a la Napster), the music business, in search of a new love and cash cow, is flirting with wireless industry. Last month at the Cellular Telecommunications and Internet Associationís annual knees-up in Las Vegas, the two new lovers stepped out together. If the marriage is fruitful, its first child will be musical ringtones, their second will be music clips for multimedia messaging and promotional purposes, and their third will be mp3 music files.
Indeed, it could be argued that all three children are on their way now. Ringtones have only recently arrived in the US, AT&T and others are using music for multimedia messaging, and every major phone and PDA manufacturer has licenses of the dominant mp3 software players from vendors including RealNetworks and Microsoft. Of course, listening to music while on the move is not a new concept. It's been around since the transistor radio, and for years, Walkmans, radios and minidisk players have been enormously popular. But what is changing is that digital music (albeit primitive) can now be delivered over the cellular infrastructure and played or stored on cell-phone like devices. As Apple iPod and other mp3 player users will tell you, once you get used to listing to an artist one song at a time, it is very hard to go back to listening to an artist one CD at a time.
Ring My Bell
Ovum, the London-based high-tech consultancy based, predicts the global mobile entertainment market will be worth $3 billion by 2005. The CTIA says that by 2006, US consumers will spend in excess of $13 billion on mobile devices and $8 billion on wireless games. Other consultancy firms such as the Yankee Group, poo poo such wildly optimistic predictions, citing a survey conducted last month in which 82 percent of US cellular subscribers said that the did not want or need mobile Internet connectivity and that current services were too expensive and too complicated to use.
So while some US consumers might find mobile e-mail and text messaging a bit of a yawn, the industry hopes that they will be turned on by downloading ringtones. European and Japanese users spent $1.3 billion on ringtones last year, accounting for a decent chunk of the music industry's total revenue of $33 billion, senior EMI vice president Jay Samit told CTIA attendees last month.
These ring tones will become the gateway drug to wireless music and entertainment services, and the music industry hopes the public, once hooked, will keep coming back for more. It's not just another whistle or bell, they believe, it is the on switch for a money machine. However, those who have watched a similar situation develop with the Web will realize it takes a great deal longer for content to become king than even Bill Gates predicted. Although he made his famous content is king speech back in 1996, only now is paid Web content taking off in large numbers.
That said, who would have thought ten years ago that these little jingles would become a billion-dollar business? Companies like Faith West and Moviso have built sizable businesses around providing ringtones, animations, games and content services in Europe and Asia, but a problem is that current wireless infrastructure is not good enough to enable users download the original sound files.
So technology vendors are coming up with innovative ways to circumnavigate this problem by providing sound reproduction software. Beatnik, a digital music software vendor founded by former pop star Thomas Dolby, has a novel way of recreating the music.
Rather than sending an audio file, what you actually send is what is akin to the sheet music, says Jeremy Copp Senior Vice President, Sales & Marketing of Beatnik. Software on the device then recreates the music. Of course, other elements, such as the voice of Britney Spears, have to be sent separately.
If one looks at the progression of technical gadgets over the last decade, we can certainly see how devices such as laptop computers, PDAs, and cell phones have become fashion statements and status symbols. It's a bit like the way wristwatches and sunglasses were status symbols for the previous generation. But now the landscape is changing again, because the data that we store on them becomes a statement in itself.
When you consume music on the TV or the radio, you consume it for yourself, says Tapio Anttila, mobile entertainment analyst with Brauning, a Santa Monica, Calif.-based research consultancy. When you consume mobile entertainment such as ring tones, you consume it for those around you.
Apart from demonstrating your uniqueness, customizing your ringtone can have practical advantages too. It can prevent the other 100 people in the room from reaching for their phones every time one rings. Furthermore, most phones allow you to customize the ringtone for each entry in your address book so you know who is calling. Childish, perhaps but nonetheless useful.
However, as Anttila points out, the use of ringtones and screensavers and animations fall somewhere between a fashion statement and a bumper sticker.
There is a big change taking place here, says Anttila. These are their lifestyle or genre statements.
Therefore, the creative types are trying to figure out how the public will want to consume this new content, or more importantly, what they will be willing to pay for. One could, for example, subscribe to a hip-hop or R&B portal such as Urban World Wireless which provides a news service, ringtones, screensavers, and the like for urban hipsters. The Ministry of Sound, one of London's big rave clubs in the city's Elephant and Castle district, now has large rave culture portal offering an online radio station, a magazine, listings, and chat. It is also prime candidate to become a lifestyle portal.
AOL Time Warner Inc.'s Warner Music Group and AT &amp;amp; T are working on another possibility. They have formed a partnership to create "Warner Music" which will deliver song clips, artist information and other materials via wireless devices. Subscribers will be offered 30-second music clips, artists images, screen savers and musical ringtones, for a fee. Indeed they are not the only ones; most of the record labels are contemplating similar services, generally some type of MMS offering.
Meanwhile, similar arrangements are springing up in Europe. The Foo Fighters, for example, are promoting their new album, One by One, with and MMS service that includes a 30-second audio clips of tracks, as well as interviews with band members and images that customers can access for about 75 cents per minute. The deal was promoted through a spam message sent to 1.6 million O2 wireless customers across Europe.
Perhaps you think that you have heard it all before well, you have. There was a lot of nonsense talked about lifestyle portals and the Internet. So what's different this time? Better content. In 1996 the content available digitally was mostly rubbish. Ringtones have a limited life span too, however, music is compelling content.
Ringtones are certainly where all this media consumption starts, says Jim Griffin, CEO of Cherry Lane Digital, and a founder of Evolab, a wireless media deliver technology company. He's also testified before the US Congress on peer-to-peer computing. Audio is to the mobile device what video is to the stationary computer.
Knockin On Heaven's Door
To Griffin, who describes Evolab as the provider of a celestial jukebox, wireless mobile audio will be more popular than the car radio.
However, we won't see any huge changes until we can stream 32k content, he says. That will be the turning point when mobile devices add personal stereo as a option.
There is no doubt in Griffin's mind that cell phones or personal communicators will become music delivery gizmos. We have too many gadgets as it is, too many chargers, and too many cables, he says. I think that we work to get more functionality out of the gadgets we have.
Nokia, Sanyo, and SonyEricsson, to name but a few, seem to think so. Indeed, it's difficult to think of a device that could play the role of personal stereo better than the cell phone. Many phones in Japan now some with a built-in camera, so they already have the necessary storage capacity.
Furthermore, battery life is not really a problem, as personal audio devices such like mp3 players use little power, and Bluetooth functionality can make uploading, downloading, and swapping data easy. Music players will, in time, just become another function, like a clock or calendar. Nokia has already integrated an FM radio in some of its models, and last year Sony had a range of memory stick phones on sale in Japan, as did Panasonic, Sanyo and other vendors. However, so far, cell phone/mp3 audio devices have been a failure in Japan largely due to the ridiculous digital rights management software. Sony software, for example, will only allow the user to transfer each track a given number of times before the license expires.
There is really no reason for digital rights management software to be so onerous or psychotic, says Ty Roberts, CTO of Gracenote, which runs on online CD information database. The music industry got lucky last time, and were able to charge people to change from the tape or LP to CD. But they are not going to get away with charging users more than once for a particular piece of music.
However, Roberts believes that there are plenty of workable solutions. For example, rather than buying the actually bits and bytes that make up the a artist's track, customers could buy the rights to play that track and download it as-needed from a service like Evolab or Gracenote. The CD database, for example, has technology that can analyze the sound wave patterns and recognize the piece of music.
Griffin says that what seems like shortsightedness on behalf of music industry, in reality, just owns up to the fact that we live in the age of Tarzan economics. The record companies will not let go of one vine, the one that pays their salary, until then next vine appears.
But the music industry sees wireless as that next vine, as EMI's Samit told the crowd at CTIA: "The music industry will save wireless, he said, and wireless will save the music industry."
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Niall McKay is a freelance journalist based in Tokyo Japan. He can be reached at www.niall.org.