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Real Promoting New Model For Cellular Music Downloads

4/03/2009 09:55:00 AM Eastern

Las Vegas — A new business model launched in Asia by RealNetworks to download music over-the-air to cellphones has made the leap to Western Europe, signaling the potential for an eventual U.S. migration.

In Spain, Real teamed with wireless carrier Vodafone and the big four music labels to bundle unlimited over-the-air music downloads and unlimited interactive music streaming with an unlimited data plan, said, RealNetworks chairman/CEO Rob Glaser here during the CTIA show. The plan costs 12 euros per month (or about $16) for a three-month introductory period ending in July, when the price rises to 16 euros per month, or about $21.50. The streaming portion of the service lets subscribers choose songs to stream by title and artist. Unlimited song downloads are locked to the phone and playable for as long as the subscriber keeps the data plan.Unlimited song downloads are locked to the phone, but consumers can pay extra for unprotected music downloads that can be copied to other music-playback devices.

“Western Europe and the U.S. move more slowly” in adopting new music-industry business models, Glaser said, because music companies in those regions have been more fearful of cannibalizing their physical-media sales. Long-term, however, the Vodafone business model in Spain will let music companies make more money, he claimed. “The more you start consumers on a legal path, the more likely they are to stay on it,” he said. For its part, Vodafone benefits by accelerating data-plan penetration, he added.

Last year, Nokia rolled out a new music-download model in the U.K., but it’s not succeeding, Glaser contended. In Nokia’s Comes With Music service, consumers get a free year of unlimited over-the-air protected-music downloads from the catalogs of the big four music labels and independents. Tracks downloaded during that time can be kept after the year is up, and additional songs can be purchased after that time on an a la carte basis from the Nokia Music Store.

The model isn’t successful, he said, because few phones are compatible with the service, and compatible phones are priced about 50 U.K. pounds (about $73) more than similar but incompatible phones, he said. That’s almost twice the price of a similar but incompatible phone. Real’s model presents less of an initial barrier to adoption, he contended.

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