Monday, February 12, 2007

Music Wars

Has Apple and its iTunes an unsustainable position with their 70% market share? Many would suggest that they are so far ahead of the pack it is difficult to be caught but perhaps there are some real competitors now appearing and the fashion bubble is about to burst.

We reported in 'Brave New World' about Spiral Frog and their huge potential to turn the tables upside down with their ‘free download paid for advertising model’. We said December and it is still ‘coming’. But they haven’t been sleeping but signing more labels and also hiring some more impressive players to their team. This certainly looks like a service to hit the road running, make significant traction and then sell out for lots of money.

This week we hear of another potential player Omniphone. The UK-based technology company has launched MusicStation, a cheap subscription-based music service for mobile phone users in Europe. It will allow subscribers to download an unlimited number of tracks to their mobiles, from its one million strong catalogue, for a monthly fee of £1.99. For an extra £1 they can listen to tracks via their PC. There are questions on whether the subscriber owns the tracks or merely has unlimited access as long as they continue to pay their monthly fee. However, with around 75% of mobile phones able to download and play music and a price so cheap, its attractive and will the consumer care?

What is clear is that whether the Sprial Frog model, or the Music Station one, steals share, the alternatives are starting to surface. Apple has had it good too long and we can expect some serious tune wars at the end of the year. No wonder Steve Jobs is offering to drop his DRM barrier.