Putting Music On A Phone Doesn't Make It 50% More Valuable

from the must-be-some-of-that-new-math dept

Mon, Sep 19th 2005 10:12am — Carlo Longino

It's pretty clear that mobile music downloads are going to have a hard time if carriers don't change their pricing plans. They assume that they can charge a premium -- and people will pay it -- over PC downloads simply because they're able to download songs from anywhere. That's a faulty assumption though, with one analyst study pointing out people's interest in downloading songs on their PC declined 58% when the price went from 99 cents to $1.49. People's interest in music phones thus far is on models that sync to PCs, since the internet-connected computer, not the mobile phone, is the predominant hub for people's digital entertainment. It's hard to see consumers changing their buying habits -- and spending more money -- just to download songs when they're not in front of a PC.

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Anonymous Coward, 19 Sep 2005 @ 12:52pm

No Subject Given
What would be really freaking sweet is to purchase something in say the iTunes store on your phone (for the same price as I would get it through the iTunes interface), be able to download/stream it right then, and also have the song available to download once I get home. (maybe automatically download once the purchase is completed on the phone?)
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Carlo Longino, 19 Sep 2005 @ 2:17pm

Re: No Subject Given
Many carriers are looking at these "dual-delivery" systems. One problem is they can come with dual charges, too, where customers pay for the track and also for data traffic. Another issue is that for these types of systems, record labels demand 2 mechanical reproduction royalty payments, since the song is being reproduced twice.
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Steve Mueller, 20 Sep 2005 @ 8:19am

Ringback Rip-Offs
One of the worst schemes is Verizon's ringback tones (music that plays for the caller instead of ringing sounds). Verizon wants $0.99 per month just for the service and $1.99 per song per year. That's right, your $2 only gets the song for a year.
I think ringback tones are an interesting idea, but I refuse to pay that much for them. Given that iTunes doesn't charge any per month fee and only charges $0.99 per song for life, the economics don't make sense.
And that's to say nothing about the fact that your callers won't likely ever hear the full song (you'll probably answer the phone or voicemail will before the song is anywhere near done). If you're only purchasing song clips, that makes the price even more ridiculous.
If Verizon would offer the songs for $0.49 per year, that might not be so bad (even with the $0.99 per month charge). Alternatively, if they charged $2.00 per month for the service and you got unlimited free access to ringback tones, even that might not be so bad (assuming you wanted to give each caller their own ringback tone).
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