Behind iTunes, there’s a place for mobile music

Like a first-year student struggling with the violin, carriers have hit a lot of wrong notes with their music offerings.
But that may finally be changing.
Verizon Wireless last week garnered headlines by teaming with MTV Networks and RealNetworks on a new, cross-platform mobile music service. The offering will integrate components of MTV’s Urge service-which drew raves from critics but was largely ignored by consumers-with Real’s subscription-based service, and will continue to bear Real’s Rhapsody brand.
The move may be a bit of a gamble for the nation’s second-largest carrier, which must sacrifice its singularly-branded Vcast Music service in favor of a more cooperative offering. But the astute strategy of partnering with high-profile companies outside wireless could help move mobile music from a niche market into the mainstream.
Like its rival Sprint Nextel Corp., Verizon Wireless has failed to find much of an audience with its own full-track music service. Consumers for decades have wanted to listen to their tunes on the move-as evidenced by the success of transistor radios, the Walkman and the iPod-but carriers have yet to offer a compelling, affordable service.
AT&T Mobility earlier this year took a step in the right direction with a sideloading-focused offering, encouraging users to transfer tunes from online music distributors to their phones. But while it leverages some existing digital music audiences, the service seems tacked-on to existing offerings. And a new, over-the-air download feature from AT&T Mobility almost comes across as an effort to confuse consumers, who can pay $7.50 a month for five song downloads.
The new Rhapsody could move the needle in mobile music, though-depending, of course, on how it’s presented to users. RealNetworks claims almost 3 million users subscribe to its online music offerings, providing Verizon Wireless with a substantial installed user base. MTV has promised to back the new service with $230 million in marketing muscle; and RealNetworks will also help promote Rhapsody.
Mobile music still faces substantial hurdles, of course. While the public still will pay $3 for a 20-second ringtone, Apple Inc.’s iTunes has set the 99-cent-per-song standard for digital downloads, leaving mobile carriers facing razor-thin margins-or in the red. And unlike Apple, mobile-phone manufacturers have yet to offer a device that captures the imagination of consumers, leaving mobile music lovers with few real alternatives to the iPod or, now, the iPhone.
Onlookers have questioned whether the trio of companies can threaten Apple’s dominance in the digital music sphere. “(W)e very much doubt that this is a serious threat to iTunes,” wrote Ovum’s Jonathan Arber.
But while MTV and RealNetworks may be making a run at Apple, the bar isn’t set so high for Verizon Wireless. Given the lack of traction by carrier-branded music services, simply becoming a second-tier player in the digital music arena will be an accomplishment.