Feature: Buying Music Over the Air (Part II)

SamsungSync.jpgThis is part II of our feature story, “Buying Music Over the Air.” (Click to read part I.)

Does instant gratification matter?
Not everyone is convinced that buying music over the air is a killer feature. For example, AT&T (formerly Cingular) is in on the cellphone music game, but they don’t allow direct over-the-air downloads. Instead, they offer a subscription service, similar to what Napster and Yahoo! offer. For a set monthly fee, consumers download any tracks they want from AT&T catalog onto their PC, and then transfer them to the phone. The sound quality is also better this way; it’s comparable to regular downloads from the iTunes Store, instead of the highly compressed (and poorer sounding) versions the other services use in order to reduce network congestion.

“We believe the ability to seamlessly sideload music from your PC to your devices is critical, since most people manage their music on their PC and are most comfortable with this process,” said Gregg Brown, the senior manager of marketing for AT&T’s wireless unit.

Kagan said that while listening to music on cellphones in general will matter to a group of customers, it will still be a relatively small slice of the market. “For the carriers, the networks, and the idea of wireless, this is another important piece of the puzzle. But the puzzle has a lot of pieces,” Kagan said. “It will grow over the years, with a burst in the beginning and then a quiet-down period. People who don’t necessarily want it today might want it in a couple of months.”

So what about the much-ballyhooed Apple iPhone? “The iPhone is a very cool phone, but it’s only going to sell 5 million to 10 million, and we have 230 million phones in the marketplace,” Kagan said. “Music is important, but it’s not for everybody. It’s only important for a specific group of customers. Cellphones are marketed differently to different groups; many people are not going to be interested in having music on cellphones.”

Still, Kagan said that the carriers realize they have to offer it because the industry is moving toward the customer. “It hasn’t been that way in the wireless world for the past 20 years,” said Kagan. “It’s always been what the companies wanted to deliver. Now we’re moving towards a time, for competitive purposes, the way the customers want it.”

“We are in the early stages of music on the phone,” Brown added. “The technology and business models are in the formative stages, so there will initially be some awkward moments. But the concept of consuming and purchasing music on a cell phone is a natural fit,” he said.

It might take some time to see which services consumers go for, or if they’re happier to just use their iPods and other portable MP3 players while the wireless industry matures. But the idea of buying an album, downloading it, and listening to it on your phone, all the in the same moment, was unthinkable just a few years ago. “The technology we’re watching unfold is breathtaking and is changing the way we think about these devices,” Kagan said.

Jamie Lendino writes mediabistro.com’s Mobile Media News blog.