Cingular Wireless Now Selling Music Subscriptions

By Antony Bruno

On Monday (November 6), Cingular Wireless will become the first U.S. operator to provide mobile access to online digital music services such as Napster, eMusic and Yahoo Music.

Unlike rivals Sprint and Verizon Wireless, which operate their own branded a la carte download stores, Cingular is instead taking a partnership approach with subscription music services as the cornerstone of its mobile music strategy.

It's a risky move that the operator believes will rescue music subscription services from their current relative obscurity by solving two major market impediments: the lack of a popular portable subscription device and consumers' reluctance to "rent" their music.

"We can double their base in the next 12 months," Cingular senior vice president of consumer data services Jim Ryan says. "I think we have a shot at actually offering a service experience that rivals, if not exceeds, what you get with an iTunes."

This strategy will be executed in two phases. For starters, in an industry first, Cingular is adding digital rights management technology from Microsoft -- known as PlaysForSure -- into five models of mobile phones, enabling users to transfer tracks from subscription services to the phones just like any other portable subscription device, all at no charge. This includes music downloaded from every music service using Microsoft's subscription DRM technology -- AOL Music, Napster, Rhapsody, Urge and Yahoo Music.


Additionally, Cingular is working with the services individually to offer wireless access to their various account services, the extent of which varies.

Napster, eMusic and Yahoo Music subscribers, for instance, can access their account, browse their respective libraries and tag which songs they want to later load onto the device when synced with a PC, all from a Cingular phone. Napster subscribers have the added benefit of being able to listen to 30-second clips, buy songs a la carte for 99 cents each and use Cingular's MusicID service to identify songs heard on the radio so they can then acquire them via Napster.

AOL Music, Rhapsody and MTV's Urge services, meanwhile, are not yet accessible through Cingular, and won't be until those companies develop a wireless portal, something that is in various stages of development.

What's missing from all this is the ability to download over-the-air tracks directly to the phone. Ryan says he expects to add this capability during the next six months and points to eMusic as the likely first to go live.

Once Cingular can deliver music right to the phone, the second phase of Cingular's strategy would go into effect. Ryan says he then wants to integrate the monthly music subscription fee into the Cingular phone bill and split the revenue with its partners. Exactly what the revenue split would be or how the deal would be structured is not something Cingular or its partners are discussing at this time, but the interest is certainly there.

Convincing customers to pay for music as a service instead of as a product has proved a significant challenge for music subscription service providers. Cingular believes wireless customers used to paying a monthly bill for phone services -- which increasingly include entertainment content -- will be more open to the concept if presented with it on their wireless phone. Consumers who have been slow to buy portable subscription devices may be more willing to experiment with them if they are compatible with a device they already own, like a mobile phone.

Reuters/Billboard Copyright 2006 Reuters Limited.

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