Prince reigns at Verizon Wireless : Direct-to-consumer approach may be first in attempts to squeeze out record label

Verizon Wireless, meet Prince, the prolific artist who aggressively protects his fusion of just about every musical genre imaginable. The man whose bitter battle with a record label prompted him to change his name to a symbol for eight years has now inked a deal with the nation’s No. 2 wireless carrier to give subscribers a free, exclusive download of Prince’s new single, “Guitar.”
Prince currently has no label to distribute his forthcoming album “Planet Earth,” and appears to be hedging his bet on this new direct-to-mobile arrangement and the major marketing and advertising push behind it.
“It’s the first direct-to-mobile relationship in kind. There’s no label involvement at all,” said John Harrobin, senior VP of digital media at Verizon Wireless.
Verizon Wireless stands to benefit significantly from the deal as well. The carrier has launched a major advertising campaign aimed at alerting consumers to it’s recently launched Vcast Song ID service, which enables customers to identify a song they hear by directing the tune to their cellphone, where they then can purchase the full track. The carrier clearly hopes its deal with Prince, who produces, composes, arranges and performs nearly all of his songs often single-handedly, will drive more customers to the service, which now has a catalog of more than 1.9 million songs.
“We at Verizon Wireless are in a unique position in that we’re not only one of the nation’s leading advertisers, but we’re also one of the nation’s leading distributors of content,” Harrobin said.
Adding weight to that is the fact the Verizon Wireless somehow convinced Prince to be featured in a new TV commercial touting the partnership, marking his first-ever appearance in a commercial. While in the past, hearing a song on a commercial typically marked the end of the song’s lifespan, Roger Entner, senior VP of the communications sector at IAG Research, believes this deal paves a new path for artists to promote their talent.
“This is the first evolution of the emancipation of music artists,” Entner said. “An established artist like Prince doesn’t need a label. So you will see more and more established stars do this.”
Entner said Verizon Wireless deserves credit for being the “fastest one to execute” on this distribution model.
“Since wireless carriers have a lot of reach, they can be the discovery mechanism for undiscovered artists,” he added. “You can turn a wireless phone into this discovery house for undiscovered artists. This is a serious threat to music labels because the only thing that’s left is the guys in the middle, artists who are in the middle of their career.
“It’s a win-win-lose and the label is the one that loses if they don’t figure out how to adjust the business models to something like that,” Enter concluded.
“The problem that music fans have today . is that music fans really don’t connect music discovery with music ownership,” Harrobin said, adding that radio “isn’t as effective as it once was for discovery.” Because of that, “customers aren’t getting the songs they want when they want them and artists are losing revenue on a lost opportunity here,” he said.
To identify the track, subscribers will have to download the application then find the commercial for the new single on Verizon Wireless’ Web site or licensed Web sites like YouTube, MySpace and others.
It’s no surprise that carriers are perpetually battling for market share, yet even Verizon Wireless is doubtful that access to exclusive content from wireless subscribers’ favorite artists is enough to get them to switch carriers.
“Our research tells us that customers don’t choose a carrier because of content specifically,” Harrobin said, adding that customers typically stay with carriers because of the service and their overall experience with the provider. “It’s not a specific reason for changing a carrier,” he explained. Harrobin, however, did add that the company’s data suggests that customers who use Verizon Wireless’ content service more often, remain more loyal to the overall service.