Zennstrom and Friis Enter the Music Streaming World

We have written much lately about the digital music streaming services spearheaded by the likes of Spotify and now those serial digitaria Niklas Zennstrom and Janus Friis have entered the race. These were the two behind Kazaa and Skype and the failed TV service Joost. The service will obviously mimic others and pick up the libraries of the major players and create a subscription streaming service that’s between desktop and mobile. It is expected to be initially rolled out in the US.

So we now have a crowed space with Pandora, Napster, Nokia, Last FM, Sky and others all trying to capture the streaming market.

From the book world it is interesting to note that this emerging market is only possible because the labels retained their digital content and didn’t rely on others to digitise and own the content.

However the music streaming world isn't all plane sailing and news today of Nokia's 'Comes With Music' service is not good with the service struggling to make any impact. Music Ally claim that only some 107,000 users have signed up for the service worldwide, with 32,000 of these being in the UK. The service which was launched in December 2007 allows subscribers to legally download more than six million tracks and keep them forever, has failed to take off whilst the likes of Spotify have exploded. It may be a lesson to those who assume that their brand and wallet guarantee success.

Mobile UK News

From 1st May anyone with a Skype friendly handset on the 3 network can make as many Skype calls and speak as long as they want. We already have used the service for the last two years and talk every day to India, the US and Australia for free. 3’s attitude towards VOIP and Skype is a breath of fresh air and even if you aren’t a 3 customer you can buy a 3 sim card for a £1.99 for a compatible unlocked handset, download the Skype client and you are connect to everyone on Skype around the world!
These moves are important as they turn the VOIP pressure on others and act as clear differentiator to anyone who makes lots of international calls or whose friends use Skype.

Another UK operator, Orange, has unveiled the UK's cheapest touchscreen smartphone for unbelievable price tag. The Vegas is sold as a pay as you go handset and available either in black or in pink, is one of the lightest and smallest smartphones weighing only 84g and looks very, similar to the HTC Touch, which interestingly costs a lot more. It has a 2.4-inch touchscreen with a 1.3-megapixel camera, MP3, integrated FM radio, a built-in browser and compatibility with microSD cards up to 4GB to complement the 64MB onboard memory. Yes and all for £49!

The downside is that the Vegas doesn't support 3G but at £49 does that really matter?

After its big launch, MusicAlly claims that Nokia’s ‘Comes With Music’ has only attracted 23,000 subscribers for the free music download service. So what is the issue after all Nokia is the biggest mobile manufacturer, the music is free and all you need is a 5310 and N95 8GB handset. Nokia is having a hard time and maybe Comes With Music isn’t a the issue. Maybe its Nokia and the old units chosen to use the service. If they widen the units who can use the service it may pick up but it can hardly be breaking even on the money that Nokia thas to pay for the licences and to run the service.

The LG GD900 Crystal will be available from July. It has a new design - a see-through tempered glass keypad design with 'cool glow' and the keypad also transforms itself into a laptop style mouse pad that offers easy web browsing and navigation and tops this with a handwriting recognition feature! LG is also offering its 3D-style interface and is hoping it can create a new design buzz.

Comes With Music

The music business is being constantly redefined by access and free to play. It seems an age since we first wrote about the SprialFrog service in the Brave New World report and the service is now live in the US. Others have followed the model and the most significant of these is Nokia with its ‘comes with music’ service.

They have clearly separated the content from the format from the device. Their focus is to sell mobiles and maintain their share of this huge market. To do so they must offer services that others can’t but unlike the iPhone’s lock in to service carriers Nokia is agnostic and will play with them all.

Nokia, is the first mobile manufacturer to push heavily into content but others will follow. Last week they struck a deal with Sony BMG to offer their catalogue to that of Universal which they secured last December.

Importantly Nokia, have decided to differentiate themselves by allowing users to keep all the music they have downloaded during their contract.

Nokia sold 146 million music phones last year and if all of those had included the "Comes with Music" bundle, just an extra $20 per phone would make Nokia's service bigger than the total digital music market. The sales of their 5310 and the 5610 top music models alone, were more than 4 million during the first quarter of 2008.

Ironically, the record labels hope that Nokia and others start to challenge the dominance of Apple's iTunes but the question remains whether they are merely bouncing from one offer to another devoid of strategy or have a master plan to restore their ailing businesses.

Now we must start to rethink who is the natural service, platform and what business model will work for the digital content we call books.