Change is inevitable. The music industry is in the process of undergoing huge change both as a result of rising technologies and demanding consumer tastes. But to put this in a negative light would be both unfair and as far from the entrepreneurial mindset that those in the business should have. This current evolution of the music industry is not a bad thing at all. Rather, if current businesses abandon any thought of fighting the change, then the transition will be smooth and both the consumer and provider will benefit. Of these technologies, mobile media–in particular cell phones–are quickly becoming the future of the industry. In the next three to five years the cell phone market will increasingly tighten its relationships with the music industry and as is already evident, promote musical products and services in hopes of providing the consumer with the best of both worlds. However, as individual preference is very important to today’s consumer, the focus can not solely be on the service or product but also on catering to the individual–the here is no longer just one mass market. The questions that remain are what type of new business models will be required of a mobile based company and what types of mobile music technologies will keep the industry alive; moreover, how will this affect the lives of the consumers.
It is quite possible that the coming years will result in one, two, or all of the five following scenarios:
1. With the ease and frequent use of telecommunicating one would reasonably think that physically traveling from place to place is outdated, and that there is really no reason to leave the home. Ironically, this is not the case and it seems that no one is ever home these days. Economist Tim Hartford calls this the “distance paradox” and further makes the claim that “mobile phones aren’t substitutes for face-to-face contact, they are complements to it (Hartford).” A huge mobile company like AT&T knows this all to well and have been the first to introduce a technology that allows the user to be in control of his or her home media while on the go. Still fairly new, this “Homezone” technology will be a huge player in the next few years. A service like Homezone will in essence allow the user to control his or her entertainment media through his or her cell-phone as long as there is an AT&T Homezone receiver on the other end. The user is able to view up to date television listings from their phone and choose which programs to record. Also, AT&T is offering the ability to “trigger” video-on-demand and music-on-demand downloads from among the most current selections (Block). AT&T is equipped with an expansive on-demand content library that includes thousands of titles that build from many partnerships with content providers. As is evident already, music and movie content providers are teaming up with mobile based businesses to attract consumers. Providers working with AT&T and Homezone are LAUNCHcast music, Movie Showtimes, and Movielink (AT&T.com). Rick Welday, chief marketing officer at AT&T believes, “Compelling features, like wireless remote access and thousands of downloadable titles, give us an entertainment service that goes beyond others on the market today (Block)." The cell phone–home entertainment connection in general is indeed a revolutionary service that seems to suit the on-demand fervently paced lifestyle of the typical consumer.
2. The next couple of years will favor those companies that can offer the best in the “all-in-one device.” A product with music and video playing capabilities alongside with phone and internet service will soon become the industry standard. In particular, wireless delivery of content is what consumers want and is simultaneously becoming the future of music distribution. A company at the forefront of this type of mobile service is Sony. When Sony introduced the
Walkman in 1979, they sparked the portable audio revolution (Sony.com). Almost three decades later and Sony is involved with the mobile phone media center revolution. The music industry is already on its way to becoming associated with mobile technology and Sony will once again be a company that blends the two together. Sony is leading the way with its line of Sony Ericsson Walkman Phones. This music based cell phone is the future platform for which the music industry will base its future. According to mobile technology review website Mobileburn, music based phones like this are readily becoming equipped with Bluetooth 2.0 stereo connections for wireless listening and increased song storage space (in eAAC+ format) that will soon average about 1500 song files (Oryl). In terms of music media libraries, the change has been going on for the past two years and will continue well into the future.
3. A mobile music service called visual radio is quickly becoming the preferred means by which consumers are exposed to radio. Visual radio’s motto is “see what you hear,” and because that is the main focus, visual radio will become a huge market. This is partly due to the fact that the technology of visual radio is simple, well understood, and inexpensive. The audio is received through normal analog FM radio that is embedded in the phone, whereas the graphics and text that is synchronized with the audio is sent through the phone via a data connection (Visual Radio.com). What makes visual radio most appealing however are the interactive capabilities. Besides music/artist quizzes, station messaging, and content download, visual radio displays artist information, local tour dates, song lyrics, and artist websites. In addition, direct interaction with the radio station is becoming more readily accessible insofar as users will be able to participate in audience poles, opinion sessions and contests. This mobile user-radio station interaction is the most important aspect of visual radio and is a means by which the music labels can benefit. Because the market is so diverse, assuming what content the majority of people want to hear is no longer applicable. The evolution of the music industry will not only rely on mobile media but also on user interaction so that listeners have a legitimate say in what musical content is made available; moreover, they can learn what the listener wants, when they want it, and in what form, because inevitably the “on-demand” individual is now and will be the music industry’s target market.
4. As technology is speeding up exponentially, the next couple of years will provide for mobile services to be taken to the next level. The ability to discover new music and manage existing music is a practice that the consumer is not only very good at, but also one that consumers rely on. Gracenote has created a mobile music service that is an example of what the next couple of years will offer the mobile music aficionado. It is called the Gracenote Mobile Music Solution Suite and is made up of various applications that can be run on mobile phones. The “on-demand” lifestyle of the consumer once again comes into the picture as a driving force behind the revolution in the industry in the form of one particular application called Mobile MusicID (Gracenote.com). According to Gracenote, the application allows consumers to “simply hold up their phone anywhere the music is playing, then a short clip of the music is matched to Gracenote's global database of audio fingerprints and music information (Gracenote.com).” The user receives the song's title, artist, and album information within seconds and with a library of over 60 million songs, this mobile service is likely to be the future of discovering new music. Also, in conjunction with Mobile MusicID, Gracenote’s Discover application provides a music recommendation engine that feeds off of stored music files and search history to recommend similar artists (Gracenote.com). But as much as mobile music technology will drive the evolution of the music industry, it will not be effective if the business and economics do not adapt to the change.
5. Phone companies in particular today make very little money directly from phone calls and as the entertainment industry in general is rapidly evolving, telecommunication companies must find new sources of revenue. A 2006 FCC report shows that around 75% of interstate cell phone calls are less than two minutes in duration, so the first action that companies must take is to use music and other media to keep the user actively on the phone (FCC.gov). Making money from data transfer on a monthly basis is likely to be a huge portion of revenue for not only telecommunication companies but also record labels. On a basic level, charging for the interactive content such as visual radio, and Gracenote’s Discover and Mobile MusicID, is the way that the companies will profit. For record labels in particular, the physical distribution of CD’s is slowly phasing out and being replaced with digital distribution. A successful business model could be to drop actual album prices and rely on interactive and promotional offers to supplement the income lost by not selling a physical good. Also, with digital distribution, the cost of third-party distributors and purchasing top line shelf space will not be incurred, further allowing for a wider profit margin.
Change is inevitable. The mobile music companies that take advantage of this change will live to tell the story...as for the rest...RIP.
AT&T, (2007). AT&T Homezone-Bringing it all Together. Retrieved April 8, 2007, from http://www.google.com/search?hl=en&ie=ISO-8859-1&q=AT%26T+homezone
Block, R (2006, May, 26). AT&T's Homezone caught! Engadget, Retrieved April 9, 2007, from http://www.engadget.com/2006/05/23/atandts-homezone-caught/
FCC, (2006). Commercial Mobile Radio Services (CMRS). Retrieved April 10, 2007, from http://wireless.fcc.gov/cmrsreports.html
Gracenote, (2007). Gracenote-Mobile MusicID. Retrieved April 8, 2007, from http://www.gracenote.com/gn_products/mobileMusic.html
Hartford, T (2007,February,3). The Distance Paradox. Slate Magazine-MSN, Retrieved April 8, 2007, from http://www.slate.com/toolbar.aspx?action=print&id=2158571
Oryl, M (2007,March,14). Sony Ericsson launches W660i Walkman Phone. Mobileburn, Retrieved April 9, 2007, from http://www.mobileburn.com/review.jsp? Id=3204&source=HOMETOP
Sony, (2007). Sony Ericsson. Retrieved April 10, 2007, from http://www.sonyericsson.com/walkman/
Visual Radio, (2007). Visual Radio-See What you Hear. Retrieved April 10, 2007, from http://www.visualradio.com/vr/about.htm
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