Resnikoff's Parting Shot: Napster/Ericsson and the Mobile Music Pie
The recent tie-up between Ericsson and Napster is a shrewd one, with the
pair likely to avoid the pitfalls faced by Apple and Motorola. While a top
Motorola executive promised the release of the iTunes phone "shortly," Steve
Jobs is clearly frustrated with the power of carriers, frustratingly
referring to the "five orifices" at a recent conference. Meanwhile, the
iTunes phone is gathering dust, with carriers seeing little upside from the
device. From a carrier perspective, passing the mobile music cake over to
iTunes-generated downloads is counter-intuitive, especially with billions in
network sunk costs in the rearview mirror. For carriers like Cingular,
Verizon and Sprint, PC-to-mobile transfers of a previously purchased track
simply rub the wrong way.
But the Napster/Ericsson partnership could play the political field with a
bit more savvy. While a release is still about a year away, the service will
be designed with both over-the-air downloads and PC-based collections in
mind, straddling both environments. Napster and Ericsson promised
"coordinated wireless and PC downloading of digital music in both
subscription and a la carte models," an approach that cuts carriers into the
action. Mobile-based streaming videos and radio stations, a growing area,
also allow carriers to charge their customers. While big mobile operators
like Vodafone are still very interested in building direct relationships
with labels, an over-the-air component from Napster and Ericsson could help
to avoid a show-stopping roadblock.
Everyone wants their piece of the pie, but the typical music consumer
toggles between the PC and mobile device. While many Asian mobile users
wouldn't even notice if their computers blew up tomorrow, European and
especially American consumers would. The computer, especially in the States,
is an incredibly important aspect of the digital music experience, and any
service that leaves that out is missing a big part of the picture. Of
course, iTunes dominates the computer-based arena, and Motorola is kind of
along for the ride. But Napster and Ericsson hope to straddle both worlds,
populating music collections in multiple environments. That is not only more
in tune with today's music consumer, it also stands a chance of making
carriers happy.
Paul Resnikoff, Editor
AI
