Ad Funded Music Videos with Rhythm

May 29, 2008

It's still far from clear if consumers are so desperate to access music on the move that they will pay a premium for it.

Mobile's unique selling point is that fans can download music wherever they are, but the case for this model was weakened this week following IPC's decision to pull its full track download (FTD) service from the NME mobile site.

Increasing numbers of mobile phones are music-enabled but the vast bulk of these are used to listen to music sideloaded from PCs according to research firm M:Metrics. It's not surprising as the experience is familiar, reliable and free.

However, operators, publishers and handset manufacturers are still trying to grab digital music market share from Apple. T-Mobile has announced today that it's to start selling entire albums for £6. Despite changes to pricing it's unclear if operators will ever succeed with an a la carte, over-the-air model.

Innovative services such as Rhythm New Media's ad-funded video streaming and subscription services such as Omnifone's MusicStation and Nokia's yet to launch Comes With Music are novel twists.

And as formerly disruptive online music services such as MySpace and YouTube get their mobile versions up and running they will also impact the market.

While the margins involved might be skinny, selling music is a volume game worth doing on mobile. It has value from a branding and commercial point of view.

The music industry is not in a healthy state and as pinning its hopes on online retailers has failed to steady the ship so mobile becomes an increasingly important opportunity for labels.

Consumers will demand choice and if the labels and hopefully the mobile industry can be dynamic enough to cook up a variety of appealing of formats then mobile stands a chance of becoming an important retail channel.

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