To sustain its market competitiveness and expand its customer base, mobile company Sprint (News - Alert) Nextel Corporation has slashed its digital music downloading fee from $2.49 to $0.99 per song, according to a Reuters report.
The price cut, effective April, will bring Sprint on par with Apple (News - Alert) Inc.’s Internet music service iTunes.
The strategy runs against Sprint’s long-standing philosophy that consumers are not price sensitive and willing to pay higher price to buy songs on the go, the report said. Sprint has generated 15 million wireless song downloads since starting the service in late 2005--compared to 2 billion songs sold by Apple iTunes since 2003.
While price reduction is a definite advantage, mobile service providers face a bigger challenge—the complexity of mobile music download compared with alternatives like iTunes.
Speaking at the opening session of the 3GSM (News - Alert) World Congress last February, Warner Music Chairman and CEO depicted mobile music downloads as too complicated, expensive and slow.
“So many platforms aren’t capable of even the most basic content configurations, like a track bundled with a video. That means buying the same content that would typically be included in an album over a mobile phone would be comparable to having to visit three stores to buy the album, its liner notes and the art work,” Bronfman was quoted as saying in a published report.
Supporting Bronfman’s claims, a survey conducted last year showed a meager 8.5 percent of users who own a phone with music downloading capability purchased through this system.
Bronfman estimated the revenues from mobile music downloads, including ring tones and over-the-air downloads, will reach US9 billion this year.
Sprint intends to preempt the entry of the much-anticipated and highly publicized iPhone (News - Alert) in June. iPhone will exclusively go on sale at Sprint’s biggest rival, Cingular Wireless, for $500.
Want more wireless news? Check out TMCnet’s complete coverage of the CTIA Wireless (News - Alert) show (March 27-29, 2007) here.
Leo Blanco is a contributing writer for TMCnet. To see more of his articles, please visit his columnist page.
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