Mobiles rise to the iPod challenge
Published: 12 Nov 2004 15:50 GMT
Different strokes
Vodafone, the world's largest mobile phone company and a trendsetter, is aiming to bridge that gap with its splashy new European service. Contradictorily, the service is also a sign of a split -- it underlines the growing divergence in the way Americans and their peers in Europe and Asia use technology to find and listen to music.
The US market remains dominated by computer-based services and by devices such as the iPod and its related iTunes service. A handful of music services for mobile phones have been launched, but these largely involve downloading music to a PC and then transferring it to a phone.
In Europe and Asia, cellular carriers and record labels are thinking more ambitiously. They see the latest generation of Internet-connected, multimedia phones as the natural extension of Sony's Walkman -- devices that will be vastly more common than the iPod and able to make it easy to impulse-buy music at any time.
The idea is still young. Music for mobile phones is relatively expensive and scarce -- just 3,000 songs are available through Vodafone's music download store, although the company promises that will rise to 50,000 in just a few months.
Formats, too, are in flux. Vodafone offers full versions of songs. In contrast, German carrier T-Mobile sells re-edited, two-minute versions of songs that are faster to download. In addition, record labels in Europe distribute albums on memory cards that can be slotted directly into phones -- most notably, the recent EMI promotion of Robbie Williams' newest album.
Phone carriers, particularly in Europe, see the music and upcoming music video services as a way to attract people to their new third-generation, or 3G, networks that can deliver broadband access to mobile phones. Collectively, European carriers have spent more than $100bn on purchasing the wireless spectrum needed to offer broadband service, and are desperate to make that money back.
On the content side, sales of ring tones indicate that the mobile market is already a gold mine. Research firm Strategy Analytics estimates $4.1bn was spent worldwide last year on ring tones and ring tunes, which are snippets of music that people use to replace phone rings. The record industry has taken note.
"All the labels are very focused on the mobile space," Scott Hochgesang, executive vice president of the Universal Music Group, says at a recent conference in San Francisco. "We may have been a bit slow to things happening on the Internet, but we won't do that again."
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