MusicStation To Challenge iPhone & iTunes

At the 3GSM Congress in Barcelona this week, Omnifone initiated a service backed by 23 mobile operators that aims to take on the iPhone and iTunes combination.

The service is called MusicStation and is an OTA (Over-The-Air) service that allows users to download music on a subscription-based service to all the latest mobile handsets offered by companies such as Nokia, Sony Ericsson, and Samsung.

Users sign up to the service and pay £1.99 (€2.99/$3.88) per week to download an unlimited amount of songs, create playlists for others to download, view the latest music news, and, like any online music store, sample music.

The MusicStation service competes head-on with iPhone and iTunes, as the iPhone mobile phone that Apple is releasing along with Cingular in the States this summer has built in iPod functionality—we assume that tracks which are downloaded via iTunes are capable of playing on the iPhone device. Currently tracks purchased from iTunes cost $0.99 (99p), so straight away the $3.88 (£1.99) per week subscription-based service is already cheaper than iTunes, provided you download more than two songs a week.

MusicStation, which is available in the second quarter of 2007 in Western Europe, will be available in over 40 countries, with the first two being Norway and South Africa on the Telenor and Vodacom mobile network operators, respectively. Other operators that will include the service are based in Australia, Hong Kong, New Zealand, the Philippines, and Singapore—no mention of the U.S. or Canada at this point.

The software, which is downloaded to your current mobile device, will be available on 75% of handsets available today, already topping more mobile phones than Apple plans to sell in the next two years (10 million). Users will be able to download tracks one at a time, although it is possible to listen to one track while downloading another. MusicStation is an OTA service and will be capable of using 2.5G and 3G mobile networks, although the former will of course offer slower download speeds.

Songs purchased over the service, which will be charged to your phone bill, can be kept for as long as the subscription service is kept up, and should you ever cancel the service and then re-apply, your songs will still be available for download. Songs will also be kept if you lose your handset or upgrade to another handset, as all data is stored on your mobile networks database. Phones with limited capacity will find the latest downloaded tracks replacing older, less played tracks—but as mentioned, all songs you’ve downloaded can be downloaded once again in the future. At present the number of songs available depends on the country, but roughly 1.2 million will be available at launch.

As for technicalities, the songs will carry industry-strength DRM and are delivered in Enhanced Advanced Audio Coding format (eAAC+). For an extra 99p a week, users will also be able to download their tracks to Mac and PC platforms, although from here it is not clear whether songs will be transferable to other MP3 players.

One thing that will be interesting to see pan out is mobile network data traffic charges. At present, O2 UK charge an extra £3 per megabyte on top of the free megabyte offered with most tariffs. Based on this, one song at 128Kbps and 3.5MB in size will cost roughly £10.50 (not including free allowance) to purchase, which is obviously far too much money. The MusicStation service is £1.99 per week and includes data traffic charges, so where does the mobile network operator get their money? Perhaps there’s a few details missing somewhere from the list already delivered in the news, both in print and online; however, I dare say that any tariff which includes MusicStation will probably double in price over the same tariff without MusicStation.