Whilst the western media slated the launch of the only ‘real’ long-term viable music-subscription-model in the form of Nokia’s ‘Comes With Music’ service, emerging markets like India and Brazil seem to be lapping up the proposition. Yet why such a difference between these two market segments in terms of uptake?
Firstly, TMV believe western-market mobile operator resistance to the Nokia CWM offering certainly did not help its launch in these markets. On the flip side the majority of these new emerging markets are largely “pay-as-you-go” (PAYG) markets. The core proposition around CWM of purchasing a handset upfront and then receiving unlimited downloads for a year slides more easily in high per capita PAYG markets.
However, what makes this CWM China launch different? It will be the first market in which the service will be launched DRM free. And about time, in TMV’s view. At launch, Chinese consumers will have a choice of eight (ok, seven really) CWM handsets (X6 32GB and X6 16GB, 5230, 5330, 5800w, 6700s, E52 and E72. TMV does ask so when can we expect the ‘no-strings’ attached free of DRM in our western-markets for the same service?
Obviously, the fact that China has such a high level of unlicensed music downloads ensure that the DRM free China launch is a “no brainer”. With the CWM service the “DRM was used to tie the music to one desktop and one phone at a time”.
At launch all major labels and 70 local independent labels were on board, with 50% of repertoire being of local Chinese origin. Going further according to the IFPI, China has a piracy rate of 90%, yet 65% of legal licensed downloads are via mobile. The service is being launched in partnership with Huadong Feitian who has over 80,000 retail outlets in China, according to music week. Yes you heard that right!
Nokia also recently launched a music service in India under the name Ovi Music Unlimited. The company has also been rather coy in terms of announcing a US date for its CWM service.
TMV do ask would there be any point in bothering to launch in the US? India and China offer the two largest markets, which are also growing at enormous rates year on year. Whereas, our traditional western markets have actually witnessed a decline in mobile music sales during 2008 and 2009. The one thing content owners need to understand is that in these massive emerging markets price point is low but volume could be massive.
So where is the real long-term opportunity lie within future of mobile music? In TMV’s view it is the emerging markets not our traditional western markets. It would be great to know where the apple iPhone sits amongst all of this…
Digital Music Trends