10/19/2009 3:06:00 PM
Spotify tie-up: Can 3 outperform Nokia in unlimited music?
3 this morning announced its tie-up with Spotify just days after Nokia suffered a leak of embarrassingly low Comes With Music usership figures.
Glass-half-empty types harbour concerns over how much consumer appetite exists for unlimited music deals on mobiles, while optimists see it as a wide-open market waiting to be exploited.
However sunny your disposition, it’s clear that 3 has some intimidating hurdles to overcome if it wants to crack the unlimited music market.
Perhaps the most prominent concern is 3’s youthful customer base. Young people generally have both the know-how and the willingness to download illegally. So can we really expect them to pay (especially when paying also means contending with DRM) for something they can easily get for free?
Maybe we can. Perhaps it’s disingenuous to the youth market to suggest they’re all a bunch of ‘knock-off Nigels ’. The fact is that no-one knows for sure whether a sufficient market exists for a well-priced, well marketed, unlimited music proposition. That’s because there has never been one before.
Comes With Music’s failure rests not on the offer itself (it’s actually a very strong proposition), but on the fact that Nokia has failed to educate consumers on its benefits. Hardly anyone outside of the mobile industry has the faintest idea of what it actually offers.
Comes With Music’s other glaring failing was the weak handsets it was available on when it launched. This dampened interest and blunted its marketing potential from the off.
With Spotify and HTC on board, 3 looks set to avoid these pitfalls.
Spotify is an up-and-coming, popular, attention grabbing and marketable brand; consumers already know what it’s about. The HTC Hero has proved popular with consumers too; it’s arguably second only to the iPhone in the multi-media handset stakes.
Crucially, 3’s tariff is also appealing. £35 a month is as much as you’d want to spend - but with 750 inclusive minutes, as well as free texts, data and Skype, you get a lot with it. Yes, you have to pay £99 up front, but with that you get Spotify premium Spotify membership for two years, which would normally cost £240.
So all in all, there’s early promise that 3 can fare better than Nokia...
Appealing proposition? Check. Good value? Check. Marketable? Check.
Consumer appetite? We'll soon find out.