Analyst believes Omnifone’s MusicStation will take big share of digital music market – he’s wrong

“The idea that a credible rival to iTunes could appear from nowhere and compete head-to-head with Apple (as Microsoft has clearly failed to do) seems far fetched to say the least. But never mind, it’s happening,” Robin Bloor writes for IT-Director.

MacDailyNews Take: No, it’s not.

Bloor continues, “The company that is presumptuous enough to believe it can do this is Omnifone and, given the reports that emerged from the recent 3GSM conference in Barcelona, the press believes it too.”

MacDailyNews Take: Because most of them can barely read press releases, much less analyze what’s in them.

Bloor continues, “Omnifone has already sewn up deals with 23 mobile network operators, that have subscribers in 40 countries, giving it a total customer base of 690m subscribers. That’s a potential customer base of course—not all of those subscribers will choose to use Omnifone…”

MacDailyNews Take: Hardly any subscribers will choose to use Omnifone.

Bloor continues, “You can do a blow-by-blow comparison of iTunes and [Omnifone’s] MusicStation, but no matter how you toss it up and catch it, it is difficult to believe that MusicStation isn’t going to take a big share of the digital music download market.”

MacDailyNews Take: MusicStation isn’t going to take a big share of the digital music download market. Believe it.

Bloor continues, “A big reason why the Music industry is backing Omnifone is the music by subscription model it operates. The idea is that you pay a regular subscription charge as part of your phone bill and you can have ‘all you can eat’ in terms of music. (The initial roll out will offer 1.2 million songs). The music companies tend to think like this: With iTunes the average user buys around 20 tracks a year—equivalent to maybe 2 or 3 CDs and generating $20 in revenue. With a subscription model at, say, $3.50 per month, the revenues per person will above $40 (twice as much).”

Full article here.

[Thanks to MacDailyNews Reader “nerdbrain” for the heads up.]

MacDailyNews Take: The music by subscription model is a proven failure. People want to own their music, not rent it. Stop paying Omnifone and you’ll have nothing. Additionally, Bloor’s numbers do not even come close to adding up. Let’s do something interesting and look at the actual facts: Omnifone’s subscription service will be £1.99 (US$3.90) per week, not month. So, it actually costs US$16.90 per month on average or $202.80 per year. In other words, Omnifone is 70% more per month than the beleaguered Napster subscription failure that currently charges (US$9.95/month).

The mobile phone networks are suckers because they, like every iTunes Store victim on the planet, want to control the customer instead of giving customers the control they want — even to the point of stupidly buying into this repackaged, over-priced, proven failure that’s called “Omnifone” this time instead of “Napster.”

Apple gives customers what they want while other outfits want so badly to reap a weekly/monthly payment ad infinitum that they keep trying to ignore reality. The mobile phone companies are deluding themselves with visions of recurring weekly charges that simply aren’t going to exist in worthwhile numbers because people don’t want what they’re trying to sell no matter how badly they dream of selling it.

Related articles:
BBC incorrectly reports Omnifone music subscription price (plus: why the phone networks are suckers) – February 13, 2007
Omnifone to challenge Apple’s iPhone, iTunes Store – February 12, 2007
Beleaguered Napster hires UBS to evaluate possible company sale – September 18, 2006
Beleaguered Napster circles bowl, subscribers drop 7 percent, Gorog won’t rule out sale of company – August 03, 2006
Free, legal and ignored: Mac- and iPod-incompatible beleaguered Napster dying at colleges – July 06, 2006
Napster does the math: layoffs commence with 10-percent of workforce lopped off – January 25, 2006
EMI Music Chairman: Music subscription services like Napster and Rhapsody haven’t beeen huge – January 23, 2006
Report: Napster executives do the math, consider selling or shutting down, layoffs imminent – January 16, 2006
Do the math: Napster posts $13.6 million second-quarter loss – November 02, 2005
Napster: the only thing missing is the sock puppet – August 04, 2005
Napster, other Windows Media-based music services ‘chasing a niche opportunity’ – June 29, 2005
SmartMoney: Napster is a snooze, gushing money and renting music is un-American anyway – July 06, 2005
Napster To Go Soon? Reports $24.3 million net loss on $17.4 million net revenue – May 11, 2005
Napster is a joke – April 05, 2005
Users thwart Napster To Go’s copy protection; do the music labels realize the piracy potential? – February 15, 2005
Why ‘Napster To Go’ will flop – February 03, 2005
The de facto standard for legal digital online music files: Apple’s protected MPEG-4 Audio (.m4p) – December 15, 2004
Napster 2.0 posts US$15 million relaunch loss – February 08, 2004

63 Comments

  1. Too expensive, and renting music is not what people want. Music is a personal thing which you must always have on hand. Not something you listen to once and toss away never to listen to it again. It just doesn’t work like that. To pay over $200 in a year and then if you decide to stop your subcription you lose everything. To me that is a very expensive waste of money.

  2. Even Middlebromfman knows this will not work. Way too expensive.

    The carrier with this service in Canada has a phone with an FM transmitter so you can hear this rented music on your car stereo. What battery life does that phone have?

    Anyone with a high school education will figure out this scam the first time they pay their cell phone bill.

  3. I’ve got a Sony Ericsson phone which plays music. When I first bought it I fitted a big memory card and filled it up with loads of music and my phone will play that music.

    Unfortunately, it’s such a hassle to get it to play music that I’ve long since given up trying. It not enough to have a feature built-in. What matter is having the feature implemented in a way that makes it useable. Sony Ericsson have one of the better user interfaces and I reckon it’s pretty cumbersome to use, so heaven help anybody trying to use a less ‘friendly’ phone than that.

    Omnifone has three major problems. One is the attitudes of the phone companies, the second is the subscription model and the third is that existing mobile phones are not sufficiently well designed to make playing music a simple process.

    Have Omnifone ever announced exactly how much money they will be passing on to the labels and artists ? Apple makes no secret that about 70% of iTS money is passed on. I’ve never seen equivalent figures for Napster, nor for Onmifone. Does anybody know the figures ?

  4. Not to mention, the service is only available on your PHONE…what if you want to have a party at your flat/apartment/house but you don’t have any music because you spent $200 a year on your phone having music.

  5. Reveal your non-DRM iTunes songs in the Finder. Open the song in QuickTime Player. Save as 3GGP (crap quality, but tiny, and acceptable for phone speakers). Bluetooth to your phone. Play on the phone speakers using the phone’s media player. Buy tunes once only, play on any device.

    Our Tunes. Your not getting my money again.

  6. The reason these expensive cell phone features like song and ring-tone downloads make any money is because a lot of stupid teens and preteens buy them and a lot of over indulgent parents pay for them.

    Their reach is very limited and their growth potential is much lower than a system that makes financial sense.

  7. If my memory serves me correct, what you’d call a “UFO” the Spaniards call “OMNI.”
    In this case, the acronyms stand for Unrealizable Fantasies Organization, or in Spanish, “Organizacion Mantiene Ni Idea” – [clueless].

    1) The most popular digital jukebox in the planet is the iPod.
    2) An iPhone is, among many other things, an iPod.
    3) There is no (3) when you think about it.

  8. MacDailyNews – the FOX news channel of Mac websites.

    This site and the stupid MDN takes that are ditched up article after article gives us Mac users a bad name. Don’t dare say sometime that isn’t 100% positive about Apple or the idiot who writes for this site will come down on you.

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