The latest "iPod killer:" mobile subscription music services

Robin Bloor seems pretty convinced that Omnifone’s MusicStation service and software for mobile devices has got Apple’s number in the digital music market.

He relies on two main arguments to make his case. First, Omnifone’s software is flexible enough to work on hundreds of millions of existing handsets. Given that the company is striking deals with many carriers around the world, it will have a built-in potential market many times the size of Apple’s iPod and iPhone user base put together.

Fine. I buy that as a potential edge for Omnifone. Where Bloor and I part company, though, is on his second argument:

A big reason why the Music industry is backing Omnifone is the music by subscription model it operates. The idea is that you pay a regular subscription charge as part of your phone bill and you can have “all you can eat” in terms of music. (The initial roll out will offer 1.2 million songs). The music companies tend to think like this: With iTunes the average user buys around 20 tracks a year—equivalent to maybe 2 or 3 CDs and generating $20 in revenue. With a subscription model at, say, $3.50 per month, the revenues per person will above $40 (twice as much).

All Omnifone has to do now, to establish itself as the other player in the music market, is to roll out the service (rollouts have already taken place in South Africa and Norway).

This assumes that the people paying the money (ie, you and me) are interested in an OTA subscription service for music. I have my doubts. If subscription was such a winner, surely we’d see some pretty impressive numbers for the Windows Media-based subscription services that already exist, and target the much more mature digital audio player market? Yes, I know subscription has its fans, but the dollars don’t lie—people prefer iPods, downloads, and ripping.

Source: – Robin Bloor – Is Apple’s iTunes Monopoly About To Die?

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