LAS VEGAS-The much-hyped “year of mobile music” started off with a bang here at last week’s 2006 International Consumer Electronics Show. But whether wireless consumers will sign on-and where mobile operators will fit in the value chain-is still very much in question.
Verizon Wireless drew headlines on the show’s opening day, adding a dual-delivery full-track download offering to its Vcast EV-DO service. Vcast Music will allow users to download songs and entire albums directly to both their handset and their Windows XP-based PC for $2; a PC-only download will cost $1. And users will be able to “side load” tracks, including music purchased from other services, from their PC to their handset via a USB cable.
The service is set to go live Jan. 16 on new handsets including the LG VX8100 and the Samsung a950; users who already have either handset can visit a Verizon outlet for a software upgrade. Handsets can be expanded with a 2-gigabyte removable memory card from SanDisk, and Verizon said it expects 4-gigabyte cards to be on the market by year’s end.
Verizon, which has licensing deals with all four major music publishers, expects to launch the service with 500,000 tunes along with exclusive audio and video content. More than 1 million songs should be available by spring.
The deal marks another win for Microsoft Corp.’s proprietary digital rights management solution. The software giant is marketing the technology to consumers under the PlaysForSure brand in an effort to entice users to buy interoperable hardware. Verizon’s new music service also relies on technology from PacketVideo Corp. and WiderThan.
While there is little doubt about consumer demand for portable music, whether they’ll pay a premium for on-the-go downloads is far from certain. Sprint Nextel Corp., the only other U.S. carrier to offer full-track downloads, charges $2.50 per download; Amp’d Mobile Inc. occupies the other end of the pricing spectrum with plans to offer full-track mobile downloads for 99 cents.
Analysts generally believe operators will settle on a per-song price in the range of $1.50 to $1.75-a price, some say, could prove attractive to users and carriers. Verizon Wireless CEO Denny Strigl hinted the carrier’s pricing may need adjusting as the market begins to find a workable business model.
“I think you will find we’ll continue to let the model evolve,” Strigl said. “(But) I think what we’ve put together is a very low price and a good value for the customer.”
Pricing questions aren’t the only hurdles facing mobile music, though. Memory limits in handsets remain a major concern, and network speed and traffic issues remain.
MusicGremlin Inc., which debuted a wireless digital audio player and music store at the show, uses Wi-Fi technology to avoid cellular network concerns. The company’s devices, which have yet to hit the market, include metadata for more than 1 million songs. Users can shop for tunes-priced at 99 cents apiece-and place orders on the handset, then have the music downloaded to the device once it gets in range of a Wi-Fi hot spot.
In addition to its consumer-targeted hardware, MusicGremlin aims to license its software to device manufacturers. While Internet music giants including Napster L.L.C. and RealNetworks Inc.’s Rhapsody are already making moves into the mobile space, co-founder Jonathan Axelrod said MusicGremlin’s three years of experience give it a substantial edge over the big guys.
“The technology (for mobile) is the core differentiator,” Axelrod said. “Doing it on a PC is easy.”
