Universal, Qualcomm Make Mobile Music

by Cassimir Medford on 29 May 2008, 13:19

Categories: Media - Communications - Internet
Topics: music , qualcomm , Universal Music Group , Michael Goodman , Cassimir Medford , BrandXtend

 

Universal Music Group on Thursday said it will offer mobile products and services direct to consumers using technology from mobile chip maker Qualcomm.

The move highlights the music industry's effort to wrest some control of its mobile audience from intermediaries such as carriers and handset makers and find new ways to generate mobile revenue.

Universal will sell merchandise such as ringtones and wallpapers and offer services such as artists’ updates through its network of web and WAP sites using BrandXtend, Qualcomm's mobile content delivery technology.

Products such as ringtones are generally available through carriers, a distribution channel popularly called "on-deck." The carriers control the distribution and content quality etc., but they also control the consumers' expectations, said Michael Goodman, an analyst with Yankee Group.

By going off-deck, which means making ringtones and other mobile phone products available on the mobile web without the direct involvement of the carriers, the record labels get a direct line to the customer.

"The carriers do not have the incentive to take the kind of risks required to innovate on the mobile web," Mr. Goodman said "They are measured on churn, subscriber acquisition, and ARPU. Those metrics are not about risk. They are about mitigating risk."

Qualcomm's BrandXtend is based in large part on technology the San Diego-based firm acquired in 2005 when it paid $57 million for United Kingdom-based ELATA.

The technology allows entertainment, music, and game companies to market their mobile wares directly to the consumer. It allows the companies to create new products and services and format them for mobile delivery.

Despite major gains in bandwidth and handset sophistication, selling products via the mobile network and the mobile web remains a challenge.