Tuesday, January 17, 2006

V Cast Music aims to write its own song

The Star-Telegram writes about the January 16 launch of Verizon's new music-downloading service, which comes on "the heels of one launched in the fall by Sprint and likely just ahead of similar services from other wireless companies."

V Cast Music "will allow subscribers to download music onto computers with Windows XP as well as directly onto their phones." Users must subscribe to V Cast at $15 month and then pay per song costs of "99 cents if purchased directly off a PC and $1.99 if purchased off the phone."

Lewis Ward at IDC foresees "companies generating roughly $150 million from wireless music in 2006."

Regarding the sunstantial price differential of purchasing via the PC versus downloading over the air, Charles Golvin at Forrester Research said, "If you think about what's the justification for that premium, it's presumably about timeliness. But the number of times when a consumer is going to say, 'I absolutely need to have this right now, and I'm willing to pay $2.50 for it,' ... are few and far between."

Ward disagreed and siad, "If they're buying ringtones at $2.50, what makes you think they won't buy whole music tracks for $2?"

That's what the music industry and network operators hope for. Golvin said, "That's where they have to go because there's so much downward pressure on voice pricing."

Ward noted that "There's a whole culture for buying things off phones. It's not like the online world where [revenue is] off ads."

In the end, Golvin doesn't think consumers will "ever view a cellphone, unlike an iPod, as a comprehensive music player." He concluded, "I think it is a much smaller market opportunity."

If pricing is out of line with what you can pay for a song via the PC then the market will stay small. However, if priced right and consumers are allowed to move their content around easily then it just might take off...