TELECOM Digest OnLine - Sorted: Cingular Wireless Now Selling Music Subscriptions

Cingular Wireless Now Selling Music Subscriptions

Antony Bruno (
Fri, 03 Nov 2006 23:31:16 -0600

By Antony Bruno

On Monday (November 6), Cingular Wireless will become the first U.S.
operator to provide mobile access to online digital music services
such as Napster, eMusic and Yahoo Music.

Unlike rivals Sprint and Verizon Wireless, which operate their own
branded a la carte download stores, Cingular is instead taking a
partnership approach with subscription music services as the
cornerstone of its mobile music strategy.

It's a risky move that the operator believes will rescue music
subscription services from their current relative obscurity by solving
two major market impediments: the lack of a popular portable
subscription device and consumers' reluctance to "rent" their music.

"We can double their base in the next 12 months," Cingular senior vice
president of consumer data services Jim Ryan says. "I think we have a
shot at actually offering a service experience that rivals, if not
exceeds, what you get with an iTunes."

This strategy will be executed in two phases. For starters, in an
industry first, Cingular is adding digital rights management
technology from Microsoft -- known as PlaysForSure -- into five models
of mobile phones, enabling users to transfer tracks from subscription
services to the phones just like any other portable subscription
device, all at no charge. This includes music downloaded from every
music service using Microsoft's subscription DRM technology -- AOL
Music, Napster, Rhapsody, Urge and Yahoo Music.


Additionally, Cingular is working with the services individually to
offer wireless access to their various account services, the extent of
which varies.

Napster, eMusic and Yahoo Music subscribers, for instance, can access
their account, browse their respective libraries and tag which songs
they want to later load onto the device when synced with a PC, all
from a Cingular phone. Napster subscribers have the added benefit of
being able to listen to 30-second clips, buy songs a la carte for 99
cents each and use Cingular's MusicID service to identify songs heard
on the radio so they can then acquire them via Napster.

AOL Music, Rhapsody and MTV's Urge services, meanwhile, are not yet
accessible through Cingular, and won't be until those companies
develop a wireless portal, something that is in various stages of

What's missing from all this is the ability to download over-the-air
tracks directly to the phone. Ryan says he expects to add this
capability during the next six months and points to eMusic as the
likely first to go live.

Once Cingular can deliver music right to the phone, the second phase
of Cingular's strategy would go into effect. Ryan says he then wants
to integrate the monthly music subscription fee into the Cingular
phone bill and split the revenue with its partners. Exactly what the
revenue split would be or how the deal would be structured is not
something Cingular or its partners are discussing at this time, but
the interest is certainly there.

Convincing customers to pay for music as a service instead of as a
product has proved a significant challenge for music subscription
service providers. Cingular believes wireless customers used to paying
a monthly bill for phone services -- which increasingly include
entertainment content -- will be more open to the concept if presented
with it on their wireless phone. Consumers who have been slow to buy
portable subscription devices may be more willing to experiment with
them if they are compatible with a device they already own, like a
mobile phone.

Copyright 2006 Reuters Limited.

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