ringtonia.com: Cellphone Companies Chime In With Music Downloading

November 1, 2004

Cellphone Companies Chime In With Music Downloading

As online music sales take off, the cellphone industry wants a piece of the action. A great article in the WSJ, written by David Pringle and Charles Goldsmith. I hope they forgive me for publishing such large excerpts.

[...] "In selling songs, phone companies are looking to borrow a page from Apple Computer Inc.'s hit iTunes service and build on their success selling musical ringtones. The music industry is hoping sales via cellphones will help compensate for the revenue lost to illegal distribution over the Internet. It is a potentially huge market -- more than one billion people world-wide own cellphones, while about 20 million have digital-music players such as Apple's iPod.

The list of phone and music companies pairing up includes some of the biggest names in each industry. Vodafone, T-Mobile, mmO2 PLC of the U.K. and others have signed agreements with Vivendi Universal SA's Universal Music Group, Warner Music Group, Sony Corp. and EMI Group PLC to sell their songs in Europe. Hutchison Telecommunications (HK) Limited, a unit of Hutchison Whampoa Ltd., has teamed up with Universal Music, EMI and Warner Music to offer music downloads in Hong Kong.

Despite the flurry of activity, the new technology faces big hurdles. Few people expect music sales to cellphones to explode like sales to personal computers have through the iTunes Web site and other similar services.

Most cellphone networks don't yet allow fast downloads and most people don't have phones capable of playing music tracks. Many of the major cellphone makers offer phones with built-in music players -- including Nokia Corp. and Siemens AG. The phones typically cost more than $300 without a monthly contract, but some contracts may include the handset free of charge. Phones with music players generally hold about a dozen songs, but those with memory cards can hold many more."