AT&T and Napster join forces for direct mobile music download

October 22, 2007

AT&T and Napster join forces for direct mobile music download Napster Mobile, AT&T’s foray into the mobile content delivery arena, faces stiff competition on price and features.

Napster Mobile will be unveiled today, October 22, as will companion service MobiVJ which serves video content to handhelds. AT&T’s late entry into the niche and the iPhone’s independent use of Apple’s iTunes service may mean the joint venture with Napster is doomed to fail. The services don’t launch until November.

Others see the move as part of the bigger whole of AT&T’s move into music distribution. The telecom company launched eMusic last month, a music download service that specializes in independent artists, reports CNN Money. Combined with Napster Mobile, the two services make more sense in that neither needs to be complete; they can complement and supplement each other.

Prices are a little high compared to iTunes, which offers tracks at $0.99. Napster Mobile is charging $1.99 per track or $7.49 for five. Prices are on par with other wireless carriers except Sprint, which recently cut their prices to $0.99. Napster Mobile’s song library is rather immense at 4 million individual songs, but that still doesn’t compete with iTunes – which users can still use with non-iPhone devices, simply by downloading the songs on their computers and transferring them via cable or Bluetooth.

Maybe it makes sense to spend the extra money to grab a song you just heard and can’t wait to get home to download to your phone, but business models aren’t based on impulse buys alone. Or at least they shouldn’t be, short of a super-market checkout lane. And despite the higher prices, AT&T doesn’t expect to see any real income from the new service because margins are so low. Revenue won’t even be noticeably affected until next year, and profitability will take even longer.

A nice feature of the service, however, is that when a user purchases a song, one copy is sent to the phone and another is sent to the user’s computer. The download to the phone takes between 15 and 30 seconds, estimates AT&T. Only time will tell whether this service will be able to survive its more established competitors at Verizon and Sprint, or the assault from left field posed by iTunes.

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