Wireless Music, Napster-Style?

A wireless music-network operator and a music company recently announced an agreement that just might be the seed of unwired Napster-style services (www.napster.com).

HitHive's (www.hithive.com) deal with EMI Recorded Music allows it to distribute songs from the music company's catalog to wireless phones and PDAs (www.emigroup.com). As a result of the deal, HitHive, one of Sprint PCS's Wireless Web partners (www.sprintpcs.com), now can offer popular music to its subscribers in addition to the more obscure music that has been offered.

After six months on the Sprint Wireless Web, HitHive has learned that wireless access to popular musical groups is one of the things its customers want, according to Bill Bassett, HitHive vice president of marketing. Bassett said subscribers also want to share their favorite music with family and friends and access the music from files stored in the handset and directly from the wireless portal.

HitHive currently offers three wireless music services: a music center that allows subscribers to create a music collection and share songs, a subscription service and a music-sampler service through which carriers can send clips to subscribers via legacy SMS systems, and subscribers can send SMS music messages to friends.

But Napster-style music sharing between wireless devices is not in the near future, mainly because of the lack of sufficient bandwidth. Today, music only can be downloaded from a computer to a phone using an accessory that enables music downloading.

Another potential barrier to mass appeal of wireless music sharing is the expense and lack of availability of MP3-capable handsets. For instance, the Audiovox (www.audiovox.com) CMP3, to be released this summer, carries a manufacturer's suggested retail price of $299, and the Samsung (www.samsung.com) Uproar M100 phone, which stores about an hour of music, is being sold by Sprint PCS for $400.

“The industry doesn't sell a lot of $400 devices, compared to the number of $40 devices that are sold,” said Rob Hyatt, Cingular executive director of data services (www.cingular.com). Hyatt doesn't expect widespread over-the-air music downloads between wireless devices for three to five years.

He does expect technologies such as Blue-tooth, as well as roll-outs of 2.5G networks such as GPRS, to make device-to-device music sharing possible with higher-end wireless devices such as PDAs and smart phones.

Analysts predict that wireless music services will be popular.

“When we do surveys of wireless consumers, downloading music is one of the more popular applications among the 18- to 30-year-old segment,” said Elliott Hamilton, Strategis Group (www.strategisgroup.com) director of global wireless. “It's already under way in Japan, and I think that once the operators have their 2.5G or 3G networks, (music sharing) is going to be a very popular application.”

According to Knox Bricken, Yankee Group (www.yankeegroup.com) analyst, wireless-industry revenues from audio capabilities in wireless handsets during 2000 were only about $1 million but are expected to reach $204 million in 2005.

“The real big killer app here is the speed of the networks,” she said.