Music Downloads for Phone Arrive
By ETHAN SMITH
Staff Reporter of THE WALL STREET JOURNAL
December 15, 2004; Page D4
In a move that promises to boost the convergence of mobile phones and music, Melodeo Inc. announced a world-wide licensing deal with Warner Music Group to sell full-track wireless downloads for specially configured cellphones.
The agreement brings together in a big way two of the music business' favorite trends: digital track sales, which have been available mainly via personal computers; and wireless music sales, which have been limited to tinny, brief and high-priced ring tones.
The downloads will first be available in Spain, to the roughly 20 million customers of Telefonica Moviles SA, the nation's main mobile-phone carrier. The company expects next year to roll out its service throughout the rest of Europe and to a number of U.S. carriers.
Music companies and wireless-phone services have struck local deals to sell music in various markets around the world. But Melodeo is the first to obtain licenses on a global basis. The company said it is in talks to add to its offerings the catalogs of the other three music majors -- EMI Group PLC, Vivendi Universal SA's Universal Music Group, and Sony Corp. and Bertelsmann AG's Sony BMG Music Entertainment.
A recorded-music executive who expects his company soon to begin offering its catalog via Melodeo called the company "the leader in the space." The executive said the global nature of the deals the company is able to strike "makes it much easier to do mobile commerce."
The music industry has long had high hopes for full-song sales to mobile phones, because those devices are ubiquitous and users are accustomed to paying for services associated with them. On the Internet, consumers have had to be coaxed away from free peer-to-peer services and on to legitimate ones. Furthermore, the music companies will see a bigger slice of revenue from the new type of downloads than they do from ring tones.
In Spain, the songs will sell for €1.50 ($2.89) each. Download times for a full song range from under 30 seconds to several minutes, depending on how advanced the network is. Users will need advanced phones. The fastest download speeds are available only to customers of phone companies that maintain so-called 3G networks. These superfast connections are in place only on a limited basis in Europe and Asia and won't be available in the U.S. for some time.
Users will need specially configured phones, with stereo headset jacks and extra memory, to take advantage of the service. A handful of such phones are available now, such as the Nokia 6620. Various handset manufacturers are expected to roll out several such models by the end of 2005.
For now, users won't be able to import their existing music collections to their music-player phones.
Other portable digital players like Apple Computer Inc.'s iPod let users move content from CDs and computers on to them.
