Sony Ericsson’s Unlimited Music Subscription Service ‘Play Now Plus’ to Debut in Sweden

| Sep 26, 2008 | Wireless Services - Europe | Competitive Intelligence Report

| Analyst: Emma Mohr-McClune

Current Perspective: Positive
Vendor Importance: High
Market Impact: High

Event Summary

September 24, 2008 – Sony Ericsson and Omnifone announced Play Now Plus, a joint service collaboration which will be channeled through the service provider community to provide European consumers with an out-of-the-box, dual-downloadable ‘unlimited music’ on a subscription basis, tightly integrated with Walkman devices. The Play Now Plus service draws on agreements with EMI, Sony BMG, Universal Music Group, Warner Music and thousands of local music labels. Telenor Sweden will be the first to launch the service in the coming weeks.

Analytical Summary

• Current Perspective: Positive on Play Now Plus, Sony Ericsson’s exclusive collaboration with Omnifone, as this white-label ‘unlimited mobile music’ service provides a compelling competitive response to Nokia Comes With Music. However, the only service launch announced to date is that of Telenor Sweden in the coming weeks; other market launches are not scheduled to appear until 2009.

• Vendor Importance: High to both Sony Ericsson and Telenor Sweden, as the latter needed to correct a competitive weakness in the mobile music arena – Play Now Plus does this, and allows the manufacturer to compete on a more even footing with Nokia. High to Telenor Sweden, as Play Now Plus is likely to become a headline service in the all-important, end-year Christmas sales period.

• Market Impact: High on the European mobile music service, as the arrival of yet another ‘unlimited mobile music’ (dual-download) subscription service indicates a seismic shift in digital music consumption. The market will see two of the biggest forces in mobile – Nokia and Sony Ericsson – going head-to-head on music. The outcome will be a new era of choice and service modeling innovation, and that’s good news for end-users.

Recommended Competitor Actions

• Nokia should note the ‘dual-downloadable’ aspect of Sony Ericsson’s Play Now Plus, and accelerate the provision of this enhancement for Nokia Comes With Music. A ‘mobile music’ service wholly dependent on side-loading (i.e., no OTA download) can only serve to make mobile operators nervous; that’s something Nokia cannot afford.

• Apple should think twice before pulling the trigger on an unlimited iTunes subscription service, as a ‘me-too’ like-for-like reaction may not be the best competitive response. It’s Apple’s innovation which has stirred this industry up; Apple should draw on innovation once again in plotting its next move.

• Nokia should work together with its service provider channel partners to ensure that Nokia Comes With Music devices are made available on a prepaid basis, together with highly aggressive subsidies (i.e., low-cost devices). Nokia should put the ensuing costs of this strategy down as PR costs – Nokia has a limited time-frame in which to enjoy its first-to-market advantage with Nokia Comes With Music, getting the service into end-user hands, thereby getting the word out, is critical.

• All European mobile operators should be talking to all the players in this emerging unlimited music space – Omnifone, Nokia, Sony Ericsson and others in the field. The mobile music market is set to change forever; mobile operators need to fully comprehend both the opportunities and risks implicit in this transformation.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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