Lynne d Johnson



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10.07.05 11:38 AM

can mobile music pay?

according to a recent study conducted by in-stat - "Mobile music services—either in the form of downloadable music files or broadcast digital radio—have greater interest among US mobile customers than gaming."

Yet, "Survey respondents who could be classified as “MP3 Intenders” have a distinct demographic profile when compared with the general population. They are younger, male, prefer Sprint PCS and T-Mobile, and spend more on their handsets."

So we could only really be talking about a small percentage of the population. And we could still very well be dealing with early adopters. Besides, pricing and revenue models haven't really been figured out.

But this isn't stopping Universal Music Group (UMG)- the world's largest record company - as it diversifies and moves further away from being a "traditional record company." Back in March, I reported that the company was moving into a paid VOD model for streaming videos on the Web - meaning that website publishers who want to stream any UMG videos would have to pay a rate based on views.

Now UMG is becoming a broader entertainment company, moving into "ringtones, paid downloads, subscriptions, advertising, and even fashion branding," according to Digital Music News. DMN also reported that UMG has "outlined strategies to take advantage of new formats like podcasting, ad-supported audio and video sites, and peer-to-peer technologies."

This week, Universal struck a dealmaking its music available to mobile phone maker Motorola for a new wireless service, iRadio, according to Reuters. And already has deals in place with Yahoo, AOL and MSN.

Based on continuing declines in record sales, no matter the success of acts like 50 Cent, Eminem, Black Eyed Peas, and Mariah Carey, UMG's move seems very smart. Risky, but smart. The true mobile business model that generates profits instead of losses for a company has yet to be actualized. Sure, ringtones are big business, but still not as huge here as in Europe or places like Korea.

The mobile landscape continues to remind me a lot of the early Web - bloated. Lots of fat, but no true killer app that turns the market inside out. It's probably not that far off yet either. In UMG's case though, at least mobile isn't the basket that the company is putting all of its eggs into.

posted by lynne | |


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