Costly Music Store Coming to Cellphones

Carl Bialik from the WSJ writes "The new Sprint Music Store is the first legal music downloading service you can access right from a cellphone, and Wall Street Journal tech columnist Walt Mossberg gives high marks to the interface, download speed and playback quality. But he criticizes the 'stratospheric new price for the legal download of a single song: $2.50.' Sprint justifies the price because of the convenience and usability of its store. Mossberg responds, 'I believe something else is at work here: a lethal combination of two industries many consumers believe typically charge too much. One is the bumbling record industry, which has been seeking to raise prices in the fledgling legal downloading market even as it continues to bleed from free, illegal downloading. The other is the cellphone carriers, or, as I like to call them, "the Soviet ministries," which too often treat their customers as captive and refuse to allow open competition for services they offer over their networks.'"

Comments

Compared to ringtones, not so bad

[intmainvoid]

When you think about the ridiculous prices people pay for ringtones it's not that crazy. So maybe it'll work for the songs that you just HAVE to have right now, but otherwise why wouldn't you save a few dollars and just wait till you're home and get onto the iTunes store?

Re:Compared to ringtones, not so bad

[MoonBuggy]

I've never understood the deal with ringtones. Apart from the fact that they're usually obnoxiously irritating, on most modern phones you can just bluetooth any old MP3 to the handset and use it as a tone anyway, yet the ringtone market makes millions. I just don't get why people do it when they have a perfectly good CD collection they could use.

Re:Compared to ringtones, not so bad

[Sir Holo]

And, as Dave Barry pointed out a week or so ago: You can't use the songs you purchase from Sprint(TM) as ringtones. Those you must purchase separately, for about $2.50. Yes, you can buy the same song twice for a single device!!! Nuts.

Re:Compared to ringtones, not so bad

[DeafByBeheading]

I like my ring-tones to actually sound like some sort of ringing.

Right on. Although, a couple of weeks ago, I was sitting around in a student lounge with some of my friends when out of the blue, we hear a modem trying to establish a connection. Turns out the phone of some guy in the lounge was ringing.

Best. Ringtone. Ever.

SonyEricsson will include iTunes

[network23]

First: Mossberg is almost right.

The other is the cellphone carriers, or, as I like to call them, "the Soviet ministries," which too often treat their customers as captive and refuse to allow open competition for services they offer over their networks."

Should be The other is the U.S. cellphone carriers... since competition works and takes care of this in all other markets.

In Sweden downloadable music for cellphones is 9 cents (0.69 Swedish Crona) per song from ComvIQ.

Second: No-one outside the U.S. will ever buy music just for their cell phones. Everyone over here uses SonyEricssons excellent K750 or W800i , syncing them with iTunes and MacOSX using scripts like iTMW or apps like Dreamsicle.

Third: I bet a case of beer that SonyEricsson will include iTunes in their cell phones during 2006. The demand is huge and they know they will have to do it, sooner or later. Nokia will also include iTunes as soon as they realize how Real sucks bigtime.

Re:SonyEricsson will include iTunes

[EnronHaliburton2004]

since competition works and takes care of this in all other markets.

The mobile providers are a cartel. They control the markets and do not allow fair and free competition. Cell phones are more expensive now then they were 5 years ago.

I just swiched my cell phone carrier after 5 years-- ATT/Cingular ended my old plan, and I wanted a new phone.

5 years ago, I paid a whopping $35 a month for Mobile service. This was the monthly service charge of $25, plus long distance surcharges, all taxes, additonal fees and 500 SMS messages. I use phone messaging as a pager service for my sysadmin job.

Today, for the same service and same number of minutes, I pay $45 a month. $30 for the plan, $10 a month in taxes and additional fees, and $5 for 500 SMS messages.

I searched for 3 months and couldn't find a better deal. The base charge is exactly the same dollar amount for the same number of minutes. Most of the increase is in the stupid fees-- "Long Distance Charge", "Verizon Wireless Surcharge", etc.

Re:SonyEricsson will include iTunes

[RzUpAnmsCwrds]

See the thing about phones in the US that you don't understand is that for the most part, they don't have SIM cards.

Well, the 65 million GSM subscribers in the US (about 40% of the market) do have SIM cards. Of course, there are lots of locked phones floating around - but that's easy to resolve. And, of course, CDMA doesn't

The US doesn't have a single cellphone standard like GSM -- the providers all use different and incompatible (and mostly lousy) technologies. Only very recently is GSM service available (on frequencies nonstandard in the rest of the world) from one (or two?) providers.

Stop spreading shit. The US has GSM, and has had it since 1995. There are two national GSM providers (Cingular and T-Mobile) that, combined, serve more than 65 million GSM subscribers.

GSM 1900 and GSM 850 are standard GSM frequencies. 900MHz and 1800MHz are reserved for military communications in the US, so GSM has to run on the frequencies reserved for cellular communications (850MHz "Cellular" and 1900MHz "PCS"). GSM 850 and GSM 1900 are used throughout North America and in many other locations around the world.

I wouldn't call CDMA2000, the other major standard in the US, "Lousey". CDMA2000 is technically superior from a radio perspective; CDMA works in places that GSM just can't handle (like 50km from a cell site). CDMA2000 1x EV-DO also offers better latency (~200ms) and bandwidth (500-700kbps, real world) than EDGE or UMTS.

things like pay-as-you-go contracts

Have you heard of T-Mobile To Go, Virgin Mobile, Boost Mobile, Cingular Go Phone, Net10, or any of the many other pay-as-you-go providers in the US?

so everyone has backup phones and phones for houseguests, and can swap the handsets between services at will

Well, being a GSM subscriber, I could certainly do this - but why I would wnat to is beyond me. Everyone has their own phone, so why would you need phones for guests? And why would you need to swap services around? It's a pain in the ass to swap SIM cards around (usually need to pull out the battery).

Even upgrading your handset in the US is a hassle -- it involves a lot of waiting on hold to talk to someone at your carrier and waiting hours for the change to be recognized by the system, and they usually charge you a big fee for the privilege.

This is just plain wrong. T-Mo/Cingular are GSM, so you just move you SIM over. Verizon and Sprint allow you to change your phone using a text message, at a store, over the phone, or using a web system. It takes less than five minutes, and there isn't a fee. And the change happens immediately.

DSL and digital terrestrial TV are similarly way more flexible, competitive, standardized and useful here than in the US.

I'll take your word for DSL, because DSL does frankly suck in the US. But digital terrestrial TV? There are few places in the US where you cannot put up an antenna and recieve free broadcast digital television. Plus, there's cable, VDSL/FIOS (if your phone company offers it), and if you don't like that, there are two DBS providers (EchoStar and DirecTV).

So, let's summarize:

• 65 million GSM subscribers in the US (40% of mobile users)
• GSM operates on standard 850Mhz and 1900Mhz frequencies because of spectrum allocation in the US
• Two national GSM providers and many local GSM providers
• Lots of pay as you go providers
• Handset changes easy with GSM or CDMA
• No fee for handset change
• Free OTA digital TV, cable, and DBS available

So, wow, was there anything that your long rant about the US got right?

Pricing

[rahulkool]

This type of high pricing is increasing the copying of music and other illegal activities ..... if these songs are priced properly then i think it will help in stopping piracy.

Markets are efficient

[thammoud]

Consumers will determine if the 2.50 is a lot of money for a song. Many consumers decided that forking $2+ for a ringtone was well worth it.

First.... err not by miles...

[MosesJones]

This might be the first in the US... but its miles from being the first available elsewhere in the world. Usually the US is a mobile backwater that lags the rest of the world by around 2 years or so, in this case its around about that mark again.

Japan and Europe have had legal download services for a significant amount of time either via 3rd parties or more recently directly, when it was being talked of as "what is next" in this market.

So like Sprint now do NFL, Europe has been doing Football (Soccer) goals for 3-4 years. TV on your mobile... yup got that... loads of crappy shit you never want... got that... and you'll be getting it soon.

Its expensive over in Europe too against iTunes et al, but that is down to the "convenience" factor (and normally lower quality) of the mobile downloads.

But "first"? Not by a long chalk.

Let's be honest here

[Fear the Clam]

People who use ringtones deserve to pay too much.

Ok, let me get this straight

[ChrisGilliard]

$2.50 per download. When a cd costs about $12 - $18. That means even for a cd with 10 tracks, the cost is $25. So, they lower their distribution cost to almost nothing and raise the price?!?!?! This is crazy. If they want people to not download the songs for free, why don't they make it affordable. If they charged a reasonable fee (like $0.25 per download, people would download songs like hotcakes around the world). Imagine the worldwide market of say 1 billion internet users and rising as opposed to the few people who will actually download this stuff.

Why cell phones suck

[typical]

When you think about the ridiculous prices people pay for ringtones it's not that crazy.

They pay this because cell phones are set up to be a closed platform, so that people can't transfer ring tones onto them. If people could just copy audio to them as easily as they do with a computer, there'd be no market -- there are *masses* of excellent, free, downloadable alert sounds for computers.

The cell phone providers don't want to be *data transfer providers*, as ISPs are -- you pay us $N, you get M amount of data each month, and your software can do whatever you want. That's a competitive market, and much less money is involved.

I'd love to see regulation out there that requires cell providers to allow *any* device (open platforms, maybe something running Linux, whatever) to connect to their network on a flat service rate, or metered based *only* on data provided. The current system is reminicent of the Bell hardwired telephone monopoly back before Bell was made to open up their phone system to any phone devices, as long as those devices didn't disrupt the network.

The fact that SMSes are more expensive than voice data on a typical US plan, for example, is absurd. This kind of screwball valuation only happens in the presence of a seriously non-free market. The incentive should be to use the loose-latency-requirements, low-bandwidth-required SMSes.

I'm one of a tiny handful of people that just won't buy a cell phone because of the fact that cells are magic black boxes run by a monopoly -- I want to be able to write (and download) my *own* alarm clock/scheduler/voicemail/etc stuff, without paying "application-level fees" to the cell provider.

Re:Why cell phones suck

[TheRaven64]

What stops you using a different device? I got a pre-pay mobile in the UK, and after a few years replaced the handset with one off eBay (Ericsson T68 - quite a nice device for its time). It cost around fifty pounds (three years ago) and supported bluetooth and GPRS. You could copy arbitrary midi files to it as ring tones, I believe (I never did). Connecting it to the network was a simple matter of removing the SIM card from the old handset and putting it in the new one.

Judge Greene's tombstone is rattling

[SysKoll]

Yup, cell phone services cost a fortune. And since there are now two main telecom companies in the US, it's going to stay that way. It's about time the stock holders get some of their money back, boys and girls. Let me remind you how it was.

Back in 1984 (how appropriate), evil Judge Greene dismantled the AT&T monopoly. Instead of a benevolent Ma Bell guiding hapless consumers through an ever-more complex world, we entered an area of free-for-all market. Ma Bell was split into 6 entities. Suddenly, there were multiple telecom providers! Phones sold in stores instead of rented! Competition! Falling prices! Granted, the USA then experienced an unprecedented telecom boom. But telecom stock went into the crapper.

For almost two decades, this orgy of consumer felicity continued unabatted. Then, fortunately, the Clinton administration issued the 1996 Telecom Act, which watered down Greene's edict and allowed a wave of mergers to take place in the telecom industry.

Now, only two telecom companies remain, having absorbed all the baby Bells. We are finally seeing prices climb and customer service go back into the abysses where it belongs. But it was a long, hard road.

(Yes, it was sarcasm. Thanks for noticing).

Re:Carl Bialik from the WSJ?

[billcopc]

I think what the parent-parent posted meant is that the industry thrives on spontaneous mistakes. No one in their right mind would pay 2.50 for a crappy compressed version of a song on a phone, unless they were either stupid or so rich they don't care (or hte money made them stupid). Otherwise you'd have to be a little tipsy, or showing off your fancy 500$ phone to some dumb fashion slut who wants your wallet, not your seed.

The reason this is "wrong" is that many of us dislike the telecoms for abusing their customers. They lock us in and screw with us, and they buy the laws to make it enforceable. Yes, it is irresponsible for someone to pay 2.50$ for a downloadable song, but what's truly irresponsible is giving money to these detached corporations. Just like doing drugs is "wrong".. I don't give a flying @#&$ what you do with your brain cells, the problem isn't about people getting stoned, it's about money falling into the hands of criminals.

While it's not illegal to be a ruthless telecom, it certainly is immoral.