Napster Mobile

Thomas Husson | March 14, 2008, 06:33 AM

As my colleague Mark Mulligan just analyzed, 02 UK and Napster have announced today a partnership to launch a mobile music service. Single tracks will initially be priced at 99p (for a promotional period) or you can benefit from 5 tracks for £4.

O2 UK is not the first operator to launch the service in Europe. In 2006, sister company 02 Ireland or TMN in Portugal had launched it. In June 2007, Napster partnered with Swisscom (they must now have a few thousands customers paying 6 euros for 5 songs a month). In January 08, Telecom Italia Mobile announced such a partnership as well.

Interestingly, the service is always co-developped with Ericsson and promoted mainly with Sony Ericsson phones. Ericsson takes charge of the back end (systems integration, operation, maintenance and content management) while Napster is the consumer brand. It will be interesting to see how the Play Now initiative will be positioned alongside those offerings.

Subscription-model are gaining ground and it would not be a big surprise to see Rhapsody being launched by Real Networks in the coming months. As Mark Mulligan pointed out, online subscription models have had better traction in the US and even there are still quite niche. However, they begin to expand in the mobile space.

With the recent announcement that Microsoft would launch its Zune platform in 2009 (follwing Musiwave's acquisition) not to mention the opening of roughly 10 Nokia Music stores in 2008, big players are simply starting to position themselves. Who is independent nowadays: Groove Mobile?

Anyway, desite encouraging volumes of downloads (SFR, Telenor), mobile music is not a revenue generator: margins are too small. It is an interesting acquisition tool, brand enhancer and increasingly a loyalty mechanism to prevent churn for mobile operators. In this regard, 02 has always had a clear positioning towards music (e.g. O2 Millenium,...)

To put it simply, it is now a clear component of most operators' strategy.