SAN FRANCISCO-Mobile entertainment took center stage for CTIA’s Wireless I.T. & Entertainment Day 2 keynote as music, data and gaming executives took their turns extolling the promise of wireless data that so far has seen mixed results.
Warner Music Group Chairman and Chief Executive Officer Edgar Bronfman Jr. got the ball rolling with positive views on the impact the wireless industry is having on the music business.
“This is becoming the music industry’s most important conference,” Bronfman said.
Bronfman touted the $320 million in downloadable ringtone revenues posted by carriers last year and predicted even greater promise for full-track music, despite continued questions regarding consumer demand, copyright issues and pricing models.
“There are doubts regarding customer demand for full-track downloads and whether carriers will make it easy to accomplish, but I believe those skeptics are wrong,” Bronfman said.
Bronfman cited Japanese operator KDDI Corp.’s success with its recently launched full-track download service, which charges significantly higher fees than traditional online services.
Bronfman also said the unbundling of albums associated with single-song downloads will provide a new bundling opportunity that will include “music and music-based content.”
RealNetworks Inc.’s Rob Glaser added that “Consumers are comfortable with paying for a mobile premium.”
Glaser also highlighted challenges the industry will face, including:
- handset operating system fragmentation;
- crossing over from early adopters to the mass market;
- and system and application complexity.
Glaser noted that the industry needs to address these challenges as “Consumers just want it to work.”
For Trip Hawkins, founder and CEO of Digital Chocolate Inc., the wireless industry should work on simplifying its content offerings if it wants to close the $94 billion gap between the $98 billion in voice revenues posted by carriers last year and the $4 billion generated by data services.
“Less is more,” Hawkins said, explaining that the easier an application is to use, the more consumers will use it.
Hawkins touted the potential of social applications that allow people to stay in contact with each other instead of more advanced gaming apps that always will pale in comparison to bigger screen versions.
“At the end of the day, handsets will always be outflanked by bigger boxes and better screens,” Hawkins said, adding the wireless industry needs to look only at fantasy sports leagues that require little network capacity, but have grown exponentially among sporting enthusiasts.
Hawkins said that while it would be impossible to completely close the gap, carriers are likely to see the most success in more viral applications.
In the end, Hawkins bluntly predicted the wireless industry would be able to close the $94 billion gap within eight years.
