New ATTWS Music Service

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AT&T Wireless launching music service
Tuesday, October 5, 2004 Posted: 1:56 PM EDT (1756 GMT)

LOS ANGELES, California (AP) -- AT&T Wireless is wading into the digital music market with a new service that enables its mobile phone users to browse and purchase song downloads over the phone and then retrieve them online on a computer.

The service, dubbed mMode Music Store, was scheduled to launch Tuesday, and represents the first attempt by a wireless carrier to compete for a slice of the music download market. Up to this point, mobile music sales have centered on ringtones, the song snippets used to customize ringer and other sounds on mobile phones.

At launch, mMode Music Store will offer roughly 750,000 tracks priced at 99 cents (euro0.8) each. Full albums will start at $9.99 (euro8.12). To buy songs on the service, an AT&T Wireless subscriber would use their phone's browser screen to search for tracks and, on some phones, listen to 30-second song samples. The mMode store also would incorporate ringtone sales.

Purchases would be billed to users' monthly wireless phone bill. Users would then have to go online to the mMode Music Store Web site and download the songs they bought onto their computer. Like many other music download stores, the tracks on mMode would download as Windows Media Player format files and could then be burned onto CDs or transferred onto portable digital players.

"From our view, it really turns the mobile phone into kind of a remote control for buying music," said Sam Hall, AT&T Wireless' vice president of mMode Services in Redmond, Washington. "Our intent is to have the mobile phone become the discovery platform."

The skeleton of the music store was developed by Loudeye Corp., which manages and distributes digital music and video.

AT&T Wireless is also tying in the service to its Music ID feature, which can recognize songs played into the phone speaker and then send text messages to users with information on the track.

That the nation's second-largest wireless carrier would venture into selling song downloads should signal the digital music market shows enough promise, said Phil Leigh, an analyst with Inside Digital Media.

"For AT&T, it's a good way to get started," Leigh said. "It enables an impulse purchase that might otherwise be lost, and it also has a novelty appeal, but it's no real threat to Apple yet."

Apple Computer Inc.'s iTunes Music Store remains the market leader in individual downloads. But AT&T's concept has potential to grow as increasingly powerful phones with hard drives capable of storing large song files enter the market.

The company expects its service to expand, including the ability to download songs directly to the phones.

But whether the market can support such an offering remains to be seen, said Josh Bernoff, an analyst with Forrester Research, Inc.

"Just what we need, another music store," Bernoff said. "We really have way more suppliers here than the market will bear, this is a very strange idea to think that we need another one."

Bernoff also said he is not convinced ringtone buyers would necessarily take to buying digital tracks on their cell phones.

"While ringtone sales may be successful," Bernoff said, "I don't really see this as tapping into any sort of market that hasn't already been reached."

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