Music download service unveiled for digital radio
British consumers are set to be the first in the world able to buy songs instantly as they listen to them on digital radio, using a download service announced on Monday by UBC Media.
The London-based radio programming producer said it would begin testing the technology on Chrysalis Group’s Heart station, with plans for a full roll-out by December.
It added that digital-radio-enabled mobile phones would be available later this year.
Korean handset makers LG and Samsung Electronics have said they expect 500,000 such phones in the UK over the next 18 months and about 10 million by the end of the decade, according to UBC Chief Executive Simon Cole.
UBC, which is the largest independent producer of radio programming for public broadcaster the BBC, said it expected the digital music download (DMD) service to generate 95 million pounds ($173 million) of turnover by 2012, with a profit of nearly 10 million.
Cole told Reuters the estimates were “very, very conservative,” based on 1.2 million users and only five digital radio stations, out of approximately 40 available now.
The forecast assumes that in six years 25 percent of mobile devices will be equipped with digital radio service, and that 10 percent of the people who own them will buy downloads, with each user purchasing six songs a month on average.
“Because we own most of the interactive digital spectrum in the UK, we’re in position to create a barrier to entry,” Cole said, adding that UBC was working with the other spectrum owners, BT Group and Carphone Warehouse founder and CEO Charles Dunstone.
Consumers would pre-pay for songs using a similar credit plan as is commonly used for mobile phone calls. Each song is expected to cost about 1.25 pounds, 60 percent more than the 79 pence for tracks bought from Apple Computer’s iTunes service, but less than the 3 pounds often charged for ringtones.
“We believe there is a premium of some kind in the mobile environment,” Cole said.
Impulse song purchases from UBC’s service also will be designed for simultaneous downloading to a Web-based music library that is compatible with other music players.
“It’s the right sort of model, and one of the key factors is that the mobile content-buying demographic has a much younger skew than on the PC,” Jupiter analyst Mark Mulligan said.
“I don’t think it’s destined to be the mobile iTunes, though, because that dominance on the PC is unique,” he added. “The mobile space has so many dynamics in the strategy chain and is balkanized by all the different operators, that the net result is there won’t be a dominant model on the mobile.”
The DMD trials will start in Birmingham at the end of July, UBC said, with Cole adding that licensing deals had already been reached with all four major music companies.
U.S. subscription satellite radio services from XM and Sirius enable consumers to record songs they’ve heard for later playback, but to buy them requires additional steps and synchronizing with a computer.
UBC separately announced on Monday that its revenue for the year ended March 31 grew by 22 percent to 19.4 million pounds, and swung to a 349,000-pound operating profit from a loss a year earlier.
(REUTERS)
