"A la carte" models superior to ad-funded and subscription alternatives, says service provider
Pay-per-track mobile music services are more rewarding for operators than subscription or ad-funded models, according to one service provider that is providing its music services to an Irish operator.
Irish operator Meteor, which launched a full track music download service on 11 November, is using a managed service from value-added services provider IMImobile.
The operator, which is offering tracks on a dual-download basis (PC and mobile) for €1.50 to registered users, is using a hosted service from IMImobile to provide 1.4 million tracks from the four major labels, as well nearly 2,000 independent labels.
Daryn Wober, VP Business Development at IMImobile, said that although there were other models emerging, such as Spotify’s ad-funded model and Omnifone’s subscription-based model, as well as handset-based services such as Comes With Music and Play Now, the per-track download model is still the most established business case for operators.
“We think that the a la carte models are the ones that are driving the greatest volumes and revenues,” Wober said. “There are a number of subscription-based models out there, but although they are attracting the PR and press attention, they are not necessarily the ones delivering the revenues,” he added. As an example, Wober said that Orange’s unlimited subscription service Musique-Max, launched in June 2008, had been sidelined following limited success.
Meteor is the first European mobile operator customer for IMImobile, and although music download services are a relatively mature service offering, Wober said that the company is in discussions with a “number” of Tier 1 operators.
“The operators like to change their suppliers every few years, either to refresh their technology or the services and functionality they can offer,” he said.
Following acquisitions made in the past year, IMImobile has integrated both dx3’s music service and Nokia Siemens Networks’ Music2You download service onto its DaVinci service delivery platform.
Anu Shah, Head of IMI Europe, said that the SDP’s modular architecture means it can integrate service from third party providers as well as its own range of services. This “future-proofing”, along with its managed service model, would give it the edge in dealing with operators, Shah said.
He added that operators thinking of future services and applications could use the platform as a “catalyst for innovation”.
Last month (November 2009) IMImobile raised $13 million in a financing round led by Sequoia Capital and existing investor First Mark Capital. It currently has 25 employees based in Europe.