Growth remains slow for mobile music services

By Antony Bruno

DENVER (Billboard) - Struggling music subscription services have opened a new front in their battle for legitimacy: the mobile phone.

But it's far from clear that the tactic will finally push them into the mainstream.

The unveiling of RealNetworks' partnership with Verizon Wireless to extend the Rhapsody service into the mobile realm follows a still-evolving alliance between rival Napster and AT&T.

Both partnerships are designed to reverse years of sluggish subscriber growth, skyrocketing customer acquisition costs and the inability of most MP3 players that are compatible with their services to make significant inroads against the market-dominating Apple iPod, which doesn't work with either service.

Yet while the benefits that the wireless operators bring certainly look good on paper, they have yet to make any significant impact.

'REVOLUTION' DIDN'T MATERIALIZE

Consider the case of Napster, which joined forces with AT&T in November 2006 when the two introduced a line of phones that enabled Napster users to sideload their subscription tracks. Jim Ryan, AT&T's vice president of consumer products at the time, suggested that the integration of mobile devices with music subscription services would revolutionize the subscription business.

"We can double their base in the next 12 months," he said. "We will solve the problem of subscription music and we will make a whole new business paradigm about digital music around subscription being real."