Motorola Unveils iRadio

sayanchak writes "Motorola is introducing iRadio in its 2nd edition of the ROKR cell phone. An article in Reuters says that iRadio will be a subscription music service that will go on sale this year. This will put Motorola in competition with other such services like XM Satellite Radio Holdings and Sirius Satellite Radio." From the article: "The iRadio service will cost about $7 (4 pounds) a month but the price may vary depending on which wireless phone service the subscriber uses, according to Motorola. U.S. service providers including Cingular Wireless and Verizon Wireless are planning mobile music download services for this year. Sprint Nextel has already launched music download and streaming services. Motorola did not reveal any service provider partnerships but said it hopes to sell the service in conjunction with wireless operators, which could sell subscribers a wireless download of a song that they discovered through iRadio."

Comments

Pay per use is undesirable for consumers

[DECS]

Pay per use is a great way to make money, but customers don't like it. Subscriptions paying for necessary utilities are tolerated, but entertainment subscriptions are a hard sell, unless they provide high value vs. the cost. Pop music does not qualify as a service people are willing to pay/minute for, rather than just carry around their CDs or their iPod.

I'd much rather pay a known cost upfront for something than "subscribe" to yet another ongoing cost. Does the rest of the world agree? Consider:

Subscriptions that work:

- Cable/Sat TV works because it offers things you simply can't get elsewhere; make those things available on DVD, and notice how people start collecting DVDs of the few shows they watch, and abandon 150 channels of nothing on. Users who want regional/sports/news content you can't get without a subscription may hang on to their cable.

- Magazines, Newspapers & other periodicals work because they offer a stream of new content you can't get elsewhere. These markets are being eaten alive by the availability of content on the open Internet however. MacWorld used to be a monthly book, now its a pretty skimpy magazine.

Subscriptions that failed miserably:

- Nobody's paying for Microsoft's WMA, now that there is iTunes and real audio CDs left (and not WMA-only CDs, as was the plan).

- Subscription software has been an extremely hard sell, despite Misrosoft's attempts at converting Windows and Office to subscription style licensing). Online games like WoW are selling subscriptions because they offer content and play otherwise unavailable elsewhere. That's why Blizzard guards its client so well. If you could plug into open "worlds" of entertainment, Blizard's game would die quickly.

- Pay per use subscriptions to Internet access were steamrolled by competition from fixed cost, all you can eat plans as soon as they became available.

So basically, I'd say that in order to sell a subscription with wide market appeal, you have to have exclusive, compelling content not generally available in any other form, and you have to actually get something, not just temporary access to it.

Pop music DOES NOT fit this model, and niche markets for audio content are not going to be made available for the cell phone market. Beyond the failure of the subscription model, who the heck is going to want to listen to radio on a cell phone? And who will want to continue to pay for it, particularly if they are billed even more for using it regularly?

And while service cutouts are a minor irritation when trying to have a conversation, dropouts and service unavailability are serious problems for people trying to listen to music live; waiting to download music using existing (SLOW) data services would be equally problematic. "Hey I want to listen to that song... look up... download.... ... continue downloading..." = sucks.

I don't think the significance of the win of iTMS over WMA has been absorbed by the music industry, from the labels to the would be distributors (cell phone providers). People overwhelmingly want to buy things they "own," and not to pay for the privelage to listen for a period of time.

Apple's win with the iPod came from offering a product that allowed users unfettered use of the music they already had (you don't pay a per miniute fee for having your iPod on), an easy path to get new music at a "known cost," and additionally, access to online music via iTMS at fixed, "known" costs. You aren't penalized for listening to an iPod for a longer time (per minute fees), or over a period of time (per month fees). That encourages iPod use, and makes it more rewarding as you use it more.

WMA and pay-per-listen cell phone plans ding you the more you use them, discouraging regular use. Guess why they aren't catching on?

Motorola, after delivering a poor iPod bundled in an unimpressive phone, now thinks they can turn the system upside down and shake money from their (potential) userbase by charging them per use.

Motorola doesn't care if you subscribe

[JimTheta]

Motorola, after delivering a poor iPod bundled in an unimpressive phone, now thinks they can turn the system upside down and shake money from their (potential) userbase by charging them per use... charges accrue whether you use it or not + they go up as you use it more.

Back it up a sec. Motorola couldn't give a rat's ass about whether you subscribe or not. Why did they make this feature? Because they know that the providers want it. If the providers like it, then they'll push Moto phones. And cell phone makers need providers to push their phones, because most phone purchases are cost-subsidized via provider's service contract.

What you need to remember is, the providers are greedy as shit. If they can charge you, they will. Cell phone makers get money from one source: phone purchase price. Providers do not share service fees or anything with them. If a cool phone feature will jeopardize a provider's ability to gouge you, phones won't have it. Conversely, if a phone feature gives a provider another thing to sell you, they'll piss their pants over it.

Do you think Moto wanted to gimp the Bluetooth on Verizon phones so you have to pay to transfer photos off them (which only benefits Verizon)? Do you think Moto wanted to limit the ROKR to 100 songs (which ensures ROKR can't compete with iPod)? Hell no. Use your brain.

Disclaimer: I work for Motorola, but I'm not involved with any of the above-mentioned products. (And I think ROKR was a dumb move also. The silver lining is that it shows providers and Apple that what they conceded wasn't enough for customers. Music phones will only get better now, though slowly.)