Mobile Entertainment

The recent news of Virgin Media’s partnership with Universal Music to launch unlimited DRM-free subscriptions has been well received. But we've seen false dawns before - BSkyB’s similar deal with Universal still hasn’t reached the consumer despite being unveiled before the end of 2008.

These are good deals for the consumer. So what factors are needed to underpin their success? Here's what we think:

Pricing: The chances of success are much higher if the music package is marketed effectively as ‘part of a premium tariff’. TDC got the balance spot on, bundling its unlimited download service as ‘free’ with a monthly broadband subscription. The company has achieved 100m music downloads in Denmark, a country with a population of less than six million.
 
Variety: Long-term success depends on a broad choice of music from a variety of sources. I understand Virgin are in talks with other major and independent music labels before the anticipated Autumn launch to ensure it’s not a damp squib. Most rival services, like AOL Germany   for example, have catalogues from numerous record labels, including all of the ‘big 4’.
 
Accessibility: Consumers will increasingly want to access tracks on a platform of their choice. It is surprising that Virgin is only offering web access to stream and download. Sideloading music just doesn’t meet consumer demands anymore. Mobile elements must be incorporated. Spotify is showing the way. It recently announced its first foray into the mobile space, although choosing Android may affect its impact in the short term.
 
Targeting: Labels and ISPs need to gather and analyse subscriber data to improve their services. Marketing bespoke playlists and genres based on a subscriber’s streaming and downloading habits is ‘win-win’ for all parties.
 
The labels and ISPs do not necessarily have the expertise to bring all of the above together. They may need to work with third parties to support a more fully rounded proposition. Fortunately, there are managed service providers that provide complete solutions agnostic of the technology (online or mobile, download or streaming) and music catalogues involved. By working with all key parties involved in the industry (labels, operators, ISPs, retailers) with a ready-made technology platform, hopefully the roll-out of more services along the lines of Virgin and Universal will be faster and even more attractive from a consumer perspective.   
 
Converged music services are gaining traction and present great revenue potential for companies who deliver what the consumer really wants on their platform of choice. Companies must continue to innovate just to avoid standing still in the fast evolving space. Exciting times are ahead.