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SCMP Reporter

MusicXS service offers a library of more than 600,000 songs
Backed by a mainland partner, 3G cellular network service provider SmarTone-Vodafone has upped the ante for local wireless carriers in the digital music subscription arena with the launch last week of MusicXS.
The on-demand service, which allows users to download and listen to digital tunes on their handsets and their laptops, is expected to help SmarTone-Vodafone establish a viable new source of revenue to offset the steady decline in voice revenue experienced across the global wireless network sector.
SmarTone-Vodafone, the mobile arm of Sun Hung Kai Properties, has used the initiative to kick off its strategic partnership with mainland-based mobile application provider Access China Media Solution.
Executives from SmarTone-Vodafone and China Media Solution claimed the new service was the world's first integrated desktop and mobile-telephone online music platform. It is also compatible with more than 50 mobile-telephone models.
Once users activate an account, they can select songs, establish a database and listen on their desktop computers. If they are SmarTone-Vodafone's subscribers, they can also transfer the songs to their phone.
Market watchers said the new service looked similar to Apple's iTunes, which allows users to buy songs on a per track basis. iTunes users can only transfer songs via their computer to Apple's iPod and iPhone and it is not compatible with other devices.
'We want to attract more users to pay for digital music,' said Douglas Li, chief executive of SmarTone-Vodafone at the launch last week.
SmarTone-Vodafone joins a growing list of telecommunications companies becoming involved in the digital content business. PCCW, the city's largest telecommunications firm, launched MOOV, the first music subscription service in the city two years ago and partners with moe than 20 local and international labels.
Hutchison, meanwhile, manages a music library through its partner Omnifone, a  Britain-based mobile music company.
Digital music was a US$1.3 billion business last year, but it still only comprises 10 per cent of total consumer music spending worldwide, according to New York-based market analyst JupiterMedia.
'The challenge remains for the industry to find new ways to compete with Apple,' said JupiterResearch vice-president Michael Gartenberg.
'As consumers' device preferences drive online music stores and services, it will become even more critical to find new device paradigms to capture consumer attention and new business models to sell content and services on those devices.'
Traditional music labels are turning to mobile operators and handset vendors to distribute legal music, as industry is hit by an increasing number of illegal downloads.
According to the International Federation of the Phonographic Industry, illegal downloads of music contribute to an estimated HK$1 billion loss to Hong Kong's music industry.
'We need to ensure the music is downloaded by Hong Kong users to protect the copyright for the music labels,' Mr Li said. 'The service is only provided to  users with a Hong Kong internet protocol address.'
Pricing has long been the key issue for legal digital music services, with some Hong Kong net surfers sharing music from peers rather than buying a compact disc or paying for a download.
For the MusicXS service, desktop internet users pay HK$56 per month for desktop access, with an unlimited download of more than 600,000 songs. SmarTone-Vodafone's mobile-phone subscribers can pay HK$96 for both mobile-phone and desktop versions.
The MusicXS price is a premium over its competitors. PCCW's MOOV, which offers more than 400,000 songs through streaming technology, charges HK$48 a month, while Hutchison Telecom's Music Station, which offers a service on a download basis, charges users HK$12 per week.
Music subscription services are proving to be one of the growth engines for mobile-phone users to spend more. PCCW has successfully boosted average revenue per user  for its 3G  service as the company bundles the MOOV music service, together with other offerings into its 3G mobile tariff plans.
PCCW 3G users spent about HK$216 per month by the end of last year, up 7 per cent from a year earlier, according to the company's results announcement last week.
Hutchison Telecom says it has the largest music library of more than 800,000 songs, of which about 30 per cent are Chinese songs.
'This is a great time to be a music consumer,' said JupiterResearch vice-president David Card.



SmarTone-Vodafone enters digital music download arena