Nokia Corp. and Sony Ericsson are gearing up for what looks to be an epic battle on the mobile content playground. But the complicated world of mobile content is more like one of those bar-fight scenes in the movies where it’s tough to tell who’s fighting whom.
Sony Ericsson last week bulked up its content portfolio, securing deals with 10 music labels and adding 5 million tracks for its PlayNow service. The joint venture between Sony Corp. and L.M. Ericsson unveiled agreements with Sony BMG, Warner Music Group, EMI, The Orchard and six others; Sony Ericsson also added 250 games through existing deals with EA Games, Gameloft and other publishers.
PlayNow came to market four years ago as a storefront for ringtones and has expanded to offer games and full-track downloads to users in 32 countries. Sony Ericsson said it hopes to offer the expanded PlayNow “arena” in Sweden, Denmark, Norway and Finland in May with other markets to follow.
Mirror, mirror
While PlayNow was very early to the content game, Sony Ericsson’s newfound ambition for the service mirrors Nokia’s plans for Ovi, an umbrella brand of mobile content and services. Ovi will offer games and tunes to wireless users, but unlike PlayNow – so far, at least – will also feature mapping applications and social networking offerings.
Ovi also will get a boost from “Comes with Music,” Nokia’s program that packages one year’s access to two million tracks with some new handsets. The service came online in the United Kingdom last year and Nokia is planning a worldwide rollout.
“Sony Ericsson had been a little bit more out in front before, but then Nokia came back with a loud shot across the bow,” said Adam Sexton, CME of Groove Mobile, which powers wireless music services for Sprint Nextel Corp., Orange, Bell Mobility and others. “I think they’re both very big, they’re both going to have very substantial music services. They’re probably a few months off each other. It’s like a horse race.”
Rough waters
Indeed, while PlayNow and Ovi are direct-to-consumer services, – employing both on-deck and off-deck strategies – Sony Ericsson seemed to have an early edge in striking content deals with carriers. Club Nokia failed after network operators strong-armed the Finnish manufacturer, but PlayNow has grown – modestly – thanks to Sony Ericsson’s carrier partners.
That growth has not been painless, though. For instance, Sony Ericsson two years ago teamed with Gracenote to offer a free mobile music identification application. Orange reportedly shut down the service, though, when it wanted to deploy its own song-ID offering at a premium.
Nokia has notched some impressive carrier relationships for Ovi, inking deals with Vodafone Group plc and Telecom Italia. But the company has hit its share of speed bumps, too: Nokia has twice postponed the launch of N-Gage, its long-awaited gaming platform, due to software glitches. Meanwhile, Warner Music Group in November withheld its content from the Ovi music storefront over file-sharing concerns on Mosh, Nokia’s social networking service.
And last week, Nokia announced plans to share Comes with Music revenues with carriers – a move that probably wasn’t part of the original strategy, in Sexton’s estimation.
“My guess is that (Nokia) didn’t initially want to do that,” Sexton stated. “Basically, the carriers said, ‘We’re going to need a little taste, guys.'”
Carrier competition
But while the two hardware companies hammer out their differences with various players in the value chain, network operators – particularly those in Europe – are teaming with a variety of partners. Vodafone U.K. offers a host of mobile music services from a half-dozen providers, for instance, including streaming, subscription and a la carte services – and that’s just through the carrier portal.
So as all eyes are on the hardware behemoths, more players are joining the field with a variety of applications and services. And while Nokia and Sony Ericsson will be formidable forces, mobile network operators will increasingly embrace off-deck services, which may result in a host of winners in the space.
“The thing about off-portal is the carriers generally make money in it,” Sexton claimed. “They don’t make as much as they do with onportal content, but they invest nothing. It’s like that old Dire Straits song – ‘Money for nothing and chicks for free.’ “
