The BPI is moving to bring the UK music industry closer to major mobile telcos to take advantage of what it sees as a “massive opportunity for digital music on 4G”.
The UK record industry trade association has been in discussions with the association of mobile operators, GSMA, recently to make the case for a stronger relationship between the two industries. It’s now preparing for meetings with operators in the UK to discuss the development of 4G music services.
Talking to Music Week, BPI CEO Geoff Taylor outlined the reasons why mobile telcos should jump into bed with the music industry for the dawn of faster mobile internet nationwide.
Taylor said that mobile music services optimised for 4G presented a great opportunity for telcos to offer real added-value to their customers and reap the rewards - as long as they were willing to put their might behind new initiatives.
“We believe that there’s a strategic advantage and an important need for mobile operators to become part of the distribution chain of the content so that they are helping to monetise the consumption of that content,” he said.
Taylor flagged up the positive effect that music can have in customer retention for mobile operators, pointing to Spotify’s partnership with Telia in Sweden, whose revenues have risen by €60m since the deal.
“Music packages are what drive subscriptions to the high-end handsets and premium tariffs,” said Taylor.
“That demonstrates the benefits of a high value package. You don’t just want 4G because you can get your emails faster – 4G is all about high value content and music is a great place to start."
The BPI will be taking an active role in helping these partnerships happen faster and gain a greater chance of success through its Innovation Panel – a group of key digital and commercial executives from labels and publishers able to advise new digital music start-ups as one music industry forum.
“We want to see innovation in the digital market, we want to see partnerships with mobile operators that share the value created in delivering music to users,” said Taylor.
“That should also give consumers much less reason to go to illegal sites to get their music,” he added. “We want to do everything we can to respond to the piracy challenge through commercial innovation rather than through regulation.
The BPI is currently having “very positive discussions” with the major European telcos in the mobile space, with Taylor admitting that “when we’ve talked previously we haven’t aligned our incentives well enough.”
As far as providers of fixed-line internet are concerned, Taylor said the failed efforts by ISPs to launch music services in the UK were disappointing but remained optimistic, saying “We still think there’s an opportunity there. That door is still open.”
4G Is Here: The UK Music Industry's View
David Joseph - CEO and Chairman, Universal Music UK
“Connectivity and portability of music is absolutely integral to what we do and the opportunities presented by increased smartphone adoption and faster mobile download speeds are huge. I expect innovation will come both from both inside and outside this industry as technological barriers are removed which we are 100% open to, albeit with one eye on the increased risk of piracy brought by 4G.
“We set up a separate mobile department back in 2006 and have experts who live and breathe this area. We talk to mobile network operators and device manufacturers on a daily basis and are constantly exploring innovative ways to work with all of our partners both online and offline to support our music and artists. We have extended rights for Deezer to be available on EE which means they can now offer a full streaming service from launch.
Nick Gatfield – CEO, Sony Music UK
"Music is the most popular form of mobile entertainment with smart phone users spending more time per day listening to music than they spend doing almost anything else. Creating bespoke 4G mobile music services integrated into the 4G offering is something we are extremely interested in exploring and we are talking to several operators about this."
Chris Maples – VP of Europe, Spotify
“We have a number of telecom partnerships around the world (including Virgin Media in the UK), and such partnerships are extremely important to Spotify.
“ISPs and mobile operators have a billing relationship with customers which makes them ideal partners for subscription services, as they can bundle their broadband and mobile services with content, and use that music content to add value to their proposition. Telcoms companies in the music space also increases revenue streams for the industry, benefiting fans and artists alike.”
Leanne Sharman, VP and Managing Director,
Digital Strategy and Business Development - EMEA for Warner Music
"As content owners in an increasingly digital and connected world we embrace technological developments that allow music fans easier and quicker access to our music.
"With so many great streaming and download services available for consumers, some already bundled with telcos, we are hopeful that the introduction of 4G networks will increase the usage of these important legitimate music sources."