MaxxoMedia Digital Media and Entertainment Trends

Story by editor Paul Resnikoff, on location in Nashville, TN.

As the ringtone continues to flatten, the mobile music sector is eyeing a number of future earners. That includes usual suspects like full-track, OTA (over-the-air) downloads and ringback tones, though a number of combination packages and windowing experiments are also in play. Discussing the matter at the recent Digital Summit in Nashville on Tuesday, Universal Music Mobile vice president of Sales and Licensing Julie Lee also pointed to a “broadening of genres and formats,” a plan that opens a myriad of possibilities. And according to Lee, packaged plays will help to stimulate consumer interest, as will the emerging, OTA sector. Others concurred, including Sony BMG senior vice president and general manager of US Digital Sales, Adam Mirabella. The executive noted that formats like ringback tones, currently soft in the United States, could gain some life if bundled with the more familiar ringtone.

Mirabella also described a transformed approach towards mobile assets, one that now involves the artist at the earliest stages. “It now starts with the creative process of the artist,” Mirabella said. That means less reformatting and backtracking, and more customized plays. The shift is part of a “major proliferation in SKUs,” according to Mirabella, an acronym that describes a unique product identifier. Like its online cousin, the mobile platform has spawned a number of new products, and more opportunities to capture a sale.

The bullish and energized tone differs from a rather depressed major label outlook, though the mobile music niche suffers from a number of early-stage disappointments. Perhaps the heavily-hyped sector still needs time to grow, though its promise of immense convenience, on-the-go discovery, and converged elegance has failed to ignite a revenue explosion, at least in the United States. “You’d think that would represent a profound improvement in sales,” mused moderator Dave Ulmer, a senior director of Entertainment Products at Motorola.

Indeed, the results have left providers like Sprint a bit disappointed in certain arenas, especially alongside nosebleed consumer responses in markets like Japan. Just recently, Sprint drastically lowered per-unit pricing on its OTA offering, a move that followed tepid consumer response. A major culprit could be the practice of sideloading, which allows consumers to simply shift PC-based contents onto their mobile devices. According to Mark Nagel, director of entertainment services at Cingular (AT&T), that is a “major component” in a larger entertainment portfolio for the carrier, one that includes paid options. But the company does not offer an OTA option, a move that signals a wait-and-see attitude towards the emerging format.