Wednesday, March 15, 2006

Music Downloads must be cheaper - from Fierce MoCo

According to a recent study conducted by Usable Products, consumers will reject any mobile music download service that charges $1.25 per music download to multiple devices. Verizon's VCast charges $1.99 per download and Sprint's Music Store charges $2.50 per download, compared to iTunes' $0.99. The study's findings contradict carriers' long-held belief that consumers are willing to pay more, maybe 100 percent or 150 percent more, for the convenience of downloading music to their handsets. The survey found only 2 percent of consumers would pay 30 percent more, 11 percent of consumers would pay 20 percent more and 30 percent would pay 10 percent more. So 43 percent of consumers are willing to pay more (at varying degrees) and the other 57 percent won't.

Granted, carriers have to work with a more complicated supply chain for their services, but unless Apple is forced to raise prices at iTunes, carriers will continue to face an uphill battle. Some analysts have joked the high prices are in place now because the networks couldn't handle a huge spike in mobile music downloads. Maybe true.

For more on music downloads and Usable Products' study:
- see this press release

1 comment:

Margaret Gold said...

And that means pressure on margins...