Mobiles are music to marketers’ ears

High costs could hinder take-up of music via mobile, but marketers have much to gain by being ‘early adopters’, argues Tom Weiss

Next month, mobile phone network 3 is to release the UK’s first “mobile-only single” – Planet Funk’s Stop Me – offering the network’s 3.5 million customers the track exclusively. The move comes as Gnarls Barkley’s single Crazy topped the UK singles chart earlier this month on the back of digital downloads alone. Meanwhile, electro-pop duo The Pet Shop Boys release a video through mobile handsets this month.

So how does all this activity bode for those looking to sell music over mobile phone networks?

Mobile phones are one of the most popular devices on which to listen to music. Since 2002, FM radios have been included in most handsets, and they now have a similar share of the “listener” market as car stereos and portable music players (TNS).

Given the success of built-in radios, it is ironic that people base their mobile music forecasts on the success of ringtones. Although many ringtones are based on music, and have generated huge licensing revenues for record companies, they are considered part of the “phone personalisation” phenomenon rather than the digital music one.

A large part of the success of mobile phones is down to personalisation. Since people have been able to program numbers into their phones, they’ve been more likely to make calls from their mobiles than a landline.

Phonic boom

From personal phone books, the trend quickly grew, with many small businesses creating “operator logos”, “faceplates” and “ringtones” based on celebrities, sports and music. Most started out below the radar of the big record companies and many sold music illegally. With ringtones, popularity boomed and the record companies got involved. MP3 ringtones – or “truetones” – now include clips from actual recordings, and record companies can and are beginning to take a leading role in this business.

However, the market for music on mobile phones is very different to that for ringtones. People buy ringtones to say something about themselves. They are, primarily, a fashion accessory and customers will pay significantly more for ringtones than conventional music.

The ringtone market is also much less competitive than the conventional music business: you can buy CDs online and in the high street, but you can only buy ringtones from your mobile operator or from the few ringtone businesses that advertise in magazines.

When selling full-track music on mobile phones, it’s important to look at what’s on offer from the competition: iTunes sells single tracks for 79p, CDs frequently sell for less than &£10, and Russian download sites offer albums for &£2, charged directly to your mobile phone bill. These prices include a licence for music that consumers can listen to anywhere, and on any device – including many mobile phones. It is cheap and flexible.

Music bought on a mobile tends to be more expensive and less flexible: you can’t burn tracks from mobile to a CD or listen to them in the car, and often you can’t copy to your PC.

The only advantage of buying music via your mobile is that you don’t have to download it from a PC. However, the additional costs and inconvenience raise further obstacles: downloading takes longer than over broadband; consumers pay the network operator additional charges and, if paying for tracks via a phone bill, the mobile operator’s commission will be much higher than MasterCard’s or Visa’s charges.

These factors may be alleviated over time, but in the short term the cost and inconvenience of buying music on mobile phones will limit the market to gadget freaks, who are more likely to buy music on their PC and download it to their mobile phone.

Most people will continue to listen to music on their PCs, hi-fis, car stereos and so on, with many upgrading to an iPod, yet basic listening habits are not going to change. The mobile phone is not going the kill the iPod. And the people who are listening to music today on their mobiles will carry on using their built-in FM radios.

Moving to ‘four-play’

Yet this fledgling market of music and mobile may well bring opportunities for marketers, many of whom are already experimenting with the mobile medium. Media owners that were already offering triple-play – television, internet and phone – are now expanding to “four-play”, bringing mobile into this equation – think of the Virgin/NTL deal, or most recently last week’s announcement from Carphone Warehouse.

These integrated services provide a significant opportunity to launch integrated campaigns across different digital media. Web marketing is already well understood, and although conventional advertising is evolving, the basis of brand building on television is also mature. Although still very much in its infancy, the ability of mobile phones to support music, TV and other rich media offers a big opportunity for brands wishing to build their reputation among young, mobile-savvy consumers.

With the launch last week of the Robbie Williams branded mobile phone from T-Mobile, it’s clear that the potential from cross promotion is great, and although such high-profile tie-ups are beyond the reach of many businesses, there are still cost-effective ways to engage with cust- omers and revenue opportunities.

The primary drivers behind mobile marketing are typically to build up a better profile of the customer base and establish tools to encourage regular, ongoing communication, and music is one way to achieve that. Coca-Cola’s recent campaign with text-ins from a Coke-can to win music is a good example of this.

Mobile marketing is set to grow exponentially over the next few years – driven in part by music, but also by the availability of other rich media on mobile devices. More people are becoming mobile-savvy and the newer devices allow for more sophisticated visuals that can support a brand across an integrated campaign.

Brands that get involved now should benefit in the short term, and will also be able to take advantage of this new medium just as it starts to become mainstream.