[Infowarrior] - Music Phones Want to Be Free

[Richard Forno]

Music Phones Want to Be Free

By Eliot Van Buskirk| Also by this reporter
02:00 AM May, 29, 2006

http://www.wired.com/news/columns/1,71000-0.html

For years, people have been speculating about the two possible futures of
portable devices. Are they going to continue to be somewhat specialized, or
will we end up with one device that does everything? From the music fan's
perspective, the core dilemma is a practical one: whether to replace iPods
with cell phones that can play music.

Although conventional industry wisdom is that the switch to music cell
phones is all but inevitable, I took the opposite position in a recent blog
post, predicting that I'd never make the switch. I cited capacity, interface
and battery problems, as well as the issue of control over one's own media.

Some of the people who responded agreed with me. Chuck, for instance, wrote,
"I carry my iPod everywhere, anyway. As an owner of a completely full 60-GB
(player), a cell phone would never be up to par."

But I took a beating from respondents who are already happily listening to
side-loaded MP3s on their phones. Cloksin wrote, "I highly disagree with
you. I have a Samsung A950 phone with built-in MP3 player. The interface is
simple, a Play/Pause, Stop, FF and Rew buttons are on the face of the phone
when closed. Just hold down the Play button and the screen on the outside
shows all my songs, I don't even have to open the phone. An iPod-like dial
lets me navigate through my music with ease."

Not everyone was so genial. D wrote, "This is the most backward article I
have ever read! You are totally misled in your perceptions of music on a
cell phone."

After reading these comments, the music cell phone question was very much on
my mind as I attended the Streaming Media East conference the following day.

Panelists on the "future of wireless devices" panel made it clear that cell
phones will need to be easy to use in order to gain traction in the portable
music market. Troy Ruhanen, executive vice president of BBDO North America,
told me, "Anything in this space has to be dead easy. I mean, look at the
iPod."

That's good advice. But the industry shows few signs of heeding it.

Howard Homonoff, CEO of Homonoff Media, said that carriers are excited about
music cell phones because they see a "dual-revenue system" on the horizon,
in which they'll sell music and other content to customers, as well as
selling ads based on their customers' geographical location and consumption
preferences. This dual-revenue system is crucial to cell carriers' success.
According to Ruhanen, "It has to pay out, because the voice model will not
pay out."

The first part of the equation is already working quite well. Ruhanen
revealed that "Cingular already makes more money from music than iTunes
does," and said that a significant number of subscribers pay $10 per month
for six new ringtones.

However, the panel acknowledged that cell phone customers could revolt
against the second phase. Carriers plan on ramping up cellular advertising
slowly. "My concern is that the first phase could kill it," Ruhanen said.
And later on, he said, "Ads later, subscriptions first."

As for privacy concerns associated with geographic and music-customized
targeting, "This is a generation that publishes itself on MySpace," Ruhanen
quipped, eliciting a chuckle from attendees.

A large percentage of Americans have expressed interest in listening to
music on their phones. According to a LetsTalk study conducted late last
year, 47 percent of Americans want music cell phones and, interestingly,
"women were more interested in new functionality ... 18- (to) 34-year-old
women were off the charts ... 76 percent wanted a music player."

So, demand for music phones is strong, and consumers and
carriers/manufacturers want cell phones to be as simple to use as an iPod.
Will carriers, seemingly hellbent on adding advertisements and targeted
promotions, be able to offer a simple, uncomplicated listening experience?
Worse still, will they eventually eliminate MP3 support to get customers to
buy their protected content? After all, MP3s are not part of the
dual-revenue system they're counting on.

It seems clear that carriers for now will see music cell phones as a failure
if people end up using them like iPods. But that's exactly the experience
they'll have to offer if they want music fans to make the switch. It's a
contradictory situation. But if they're smart, they'll keep the lesson of
the iPod's simplicity in mind, even at the expense of ad- and music-sales
revenue in the short term. If they miss a trick, Apple Computer's rumored to
be waiting in the wings with its iPhone, and probably wouldn't mind
repeating the lesson.

- - -
Eliot Van Buskirk, who also contributes to the Listening Post blog, has
covered digital music since 1998, after seeing the world's first MP3 player
sitting on a colleague's desk. He plays bass and rides a bicycle.