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Wireless digital music slow in coming

Industry Standard

By David Sims

(IDG) -- Of all the possibilities for delivering entertainment to mobile devices, downloading music to mobile phones seems at least an idea worth considering, right? After all, there are more than 700 million mobile phones in the world (1 billion by the end of next year), and downloading digital music is one of the most popular activities on the Internet.

However, it won't become ubiquitous anytime soon. Downloading music to wireless devices is prohibitively expensive, according to Ric Dube, who laid out the numbers for a small crowd at last week's MP3 Summit at the University of California at San Diego. Dube, an analyst at the digital-music research firm Webnoize, explained that at current compression rates, MP3 music files weigh in at about one megabyte per minute, meaning the average song comes packaged as a bulky 4-megabyte file. Downloading a file that size over even the most advanced commercial mobile networks costs more than $11 per song, just in bandwidth costs. And that's before anyone sees a dime on royalties. INFOCENTER
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Not surprisingly -- even at a conference whose theme was taking digital music mobile -- attendees displayed a healthy amount of skepticism about the future of downloading music wirelessly. Currently, only one company in the U.S. and two in Japan offer wireless music services. And even Michael Robertson,'s CEO, tempered his enthusiasm for the idea: "The future of music is wireless -- but it's not here yet."

In order for the wireless-music equation to add up, what will have to change over the next few years? Dube offered the most comprehensive (if bullish) predictions for the future of mobile digital music:

Prediction #1: Delivery costs will drop as compression becomes more sophisticated and bandwidth increases. By 2006, that same song might require only 1 megabyte of storage, and the third-generation (3G) services available then (even by conservative estimates of download speeds) could deliver the same file for only 27 cents' worth of bandwidth. Likewise, the cost of delivering a three-minute video clip could drop from $23 today to a more reasonable $1.50 by then.

Prediction #2: A modest percentage of technologically-savvy potential users (that is, U.S. college students who use wireless devices) surveyed said they would pay for the ability to download music and videos. In Dube's sample, 17 percent said they would pay as much as $20 extra per month to get music on their mobile, while 26 percent said they wouldn't pay for that service.

Prediction #3: Although Web users have been led to expect (and then demand) content for free, Dube says, wireless users don't have those expectations. "People understand paying for a wireless service," he says. "They already do it. By supplying content, you'll create a paid-service model that the Internet never had."

Dube added that by 2004, there are expected to be 228 million mobile users with fast wireless connections -- that is, anything greater than 114Kbps, about twice as fast as a dialup modem -- who could make up a potential market for the services. Most will be in Europe, with the remaining third in North America and East Asia. In closing, Dube advised the industry to nurture the market for wireless entertainment, identify early adopters and "cultivate nascent demand."

"People are willing to pay for things, and they don't even know what they're willing to pay for," he said. In other words, if we build it, some have already promised they'll come.

• MP3 Summit 2001

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