Wireless phones set to become mobile jukeboxes

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06/11/2002
 
Wireless phones set to become mobile jukeboxes

AMSTERDAM (Reuters) — Within a month of launching its exclusive Spider-Man ringtone, timed to coincide with the hit movie, Cingular Wireless said the theme tune became its most popular downloaded tone.

"It was very, very popular," said Denni Breuggman, director of marketing for ringtones and other entertainment features at Atlanta-based Cingular, the second-largest U.S. wireless telephone services company.

Cingular's customers paid 99 cents each to download the tone, which plays the Spider-Man theme every time a call comes in.

Cingular, a joint venture between local phone giants SBC and BellSouth, offers more than 500 ringtones, the demand for which is increasing steadily month over month.

But ringtones constitute only the first movement of an entire symphony of new music services that mobile network operators and entertainment companies are planning to offer consumers.

Services will include so-called "polyphonic" ringtones that do away with the mechanical-musical sound and play like the actual song. Eventually, there will be services that distribute the music itself.

Ringtones are already so popular in Europe that Danish market researcher Strand Consult predicts the number of downloads will account for some $2 billion in revenue this year.

Wireless operators making money on the additional data traffic, as well as music artists who get about 15 cents in royalties per musical download, are in for a cash windfall, Strand said.

"With 2 billion new ringtones expected to be sold, artists like Janet Jackson stand to make a fortune" in the European market alone, Strand Consult Chief Executive John Strand said.

The ringtone market has set the stage for smarter handsets that produce a variety of sounds — from violins to drums — and can even double as mini karaoke machines. Already standard on handsets in Japan and South Korea, the polyphonic phones are rolling out in Europe and are due on US shores later this year.

The whole song

Also this year, the wireless industry will be selling digitally packaged music to customers via mobile phones.

Mobile networks worldwide say they are striving to meet a burgeoning demand — mainly from teen and young-adult customers. Industry analysts say the carriers are smart to move fast as cell phone features popular with this age group often add up to huge revenue gains.

"We are seeing teenagers spending less money on clothing and Nike shoes, so they can spend more on communication," said Lars Vestergaard, research manager for mobile communications at International Data Corp., a market researcher in London.

IDC predicts that by 2005, in Europe alone, there will be 37 million users of music delivered wirelessly, with similar services generating revenues of up to $5 billion per year. The researcher has not yet made projections about the US market, which has been slower to offer music services.

Already in Japan, NTT DoCoMo's 32.6 million users of i-mode, the most popular Internet-ready mobile phone service, says it gets 42% of its revenue from ringtones and "screensaver" graphic downloads.

The i-mode service is so big in Japan that DoCoMo has exported it to the Netherlands, Germany and France, by hooking up with European networks.

US operators, including Cingular, are eagerly awaiting the possibility of offering polyphonic ringtones in the hopes of duplicating the Asian success story.

"What we are waiting on is the handset technology. They have to be able to accept and store the polyphonic file. We are keeping close tabs on what the handset makers are doing," Cingular's Breuggmann said.

Finnish telecoms equipment heavyweight Nokia, the world's largest maker of cell phones, said most of its newer handsets can handle polyphonic sounds, but it generally develops new features first for the European or Asian markets, where the concentration of diehard mobile users is highest.

Name that tune

Next in line to turn the phone into a musical entertainment device are radio and airwave-borne song downloads.

Mobile phone users in Britain soon will be able to use their phones to identify a song they hear in a pub, in a shop or on the radio. If they want, they can also buy a CD containing the song online. A company offering this new service is Shazam Entertainment, a venture-backed start-up in London.

To use the service, Shazam says, you dial a four-digit number, hold the cell phone up for 15 seconds and the service will return in seconds the name of the song and its performer via SMS (short message service) from a one-million song database.

Your mobile network will bill you about 70 cents per song title with a "healthy chunk" of that money paid to Shazam, who will offer the CDs containing the songs you requested via its Web site.

Shazam's managing director, Chris Barton, 32, says he expects to offer a similar service in the United States by early next year and that a "very large US phone company is investigating a pilot (test) service."

In Europe, Shazam hopes to attract users as young as 12, but is directing its marketing efforts mainly at the 18-to 25-year-old group, almost 80% of whom have mobile phones. Barton said the listener group is expected to be older in the United States.

"There's lower penetration there in the youth segment, but it's increasing rapidly. We might very well target a slightly older group in the US, while we wait for youth penetration to rise," Barton said.

Shazam appears to be first on the market, but other telecom software companies are developing similar technology, said Jon Watts, a consultant to telecom operators with Spectrum Strategy Consultants in London.

The future of music entertainment is going mobile.
 

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