CTIA: Zune taps the power of radio for song sales

SAN FRANCISCO—Microsoft is targeting an oft-ignored feature of portable music devices as the next big driver for mobile music sales: the FM radio. Built into MP3 players, mobile phones and myriad other devices, the FM radio has the potential to be a discover engine for new music, and through a new partnership with media giant Clear Channel and other radio broadcasters, Microsoft is trying to tap into that potential.

Microsoft revealed today an application that will be loaded into all Zune music players going forward, allowing the device to digitally identify tracks heard on the FM radio and either save that information for future purchase or automatically initiate a transaction over a Wi-Fi network, downloading the song on the spot. The technology uses digital song tags developed by Clear Channel and Jump2Go and embedded in every song broadcast to identify a particular track. If a listener chooses to ‘tag’ a track, the Zune player either stores that song information for later purchase or, if a wireless connection is available, retrieves the content from Microsoft’s music store and bills the customer instantly.

More than 450 radio stations owned by Beasley, Bonneville, CBS Radio, Citadel, Clear Channel Radio, Cox Radio, Emmis, Entercom and Greater Media are embedding song tags in their broadcasts today as many stations and copyright holders use the information to track radio play already. Many more stations will roll the technology out in coming weeks, giving not just Microsoft but any digital music player manufacturer or application provider an enormous untapped resource, said Jeff Littlejohn, Clear Channel Radio executive vice president for distribution development.

“Music discovery primarily happens on the radio, particularly free broadcast radio,” Littlejohn said. “60% of new music is discovered that way.”

While there have been several other attempts to integrate mobile music purchasing with radio, none of them have been integrated. Companies like Gracenote have launched song-identifying services that require users to record snippets of songs and ship them off to a network server, which then attempts to identify the song and initiate a mobile transaction. Those types of services can be ungainly, though, Littlejohn said, and prone to error as background noise can disrupt the audio quality. But the song codes are virtually foolproof, Littlejohn said: As long as the broadcaster embeds the digital codes and the application provider sells that particular track, the transaction is seamless.

While Littlejohn could not give particulars about the deal with Microsoft, he said there is potential revenue-sharing for such a discovery service in the future. The money Clear Channel would collect on such a transaction, however, is minimal. Clear Channel is trying to encourage more vendors to embrace the technology, thus embedding more radios in consumer devices. The service has the side benefit of increasing the value of radio to the average listener, Littlejohn said.

“Revenue from song sales is not why we’re doing this,” Littlejohn said. “We want to increase our satisfaction with existing subscribers, get them to listen longer and in general become more loyal listeners.”