Mobile Monday

Italy
www.mobilemonday.it
Introducing Mobile Music Services
Henning Reich, Product Management Mobile Phones
Rome, October 2004
Content

What is mobile Music ?

Who are the mobile music customers ?
How do I bring content to the customer ?
Why mobile music is so important for operators
What are thoughts of the Music industry on mobile music
The problem from customers perspective: DRM
Device roadmap to mass market
Usability
Mobility does not have room for wires

© Siemens COM; Subject to Change without Notice Page 2

What is Music? Emotion! Brand!

© Siemens COM; Subject to Change without Notice Page 3

Key: close cooperation between operator and supplier

© Siemens COM; Subject to Change without Notice Page 4

Key: close cooperation between operator and supplier

© Siemens COM; Subject to Change without Notice Page 5

What is mobile Music ?
Who are the mobile music customers ?
How do I bring content to the customer ?
Why mobile music is so important for operators
What are thoughts of the Music industry on mobile music
The problem from customers perspective: DRM
Device roadmap to mass market
Usability
Mobility does not have room for wires

© Siemens COM; Subject to Change without Notice Page 6

 MUSIC customers:
What role does music play in their lives?
 


 
 
  
  
 


  
 
 
 
   
 

 
 
  
 


 
 

 


© Siemens COM; Subject to Change without Notice Page 7
 MUSIC customers: the two segments to start


  


 
 
 
  
 

  

 







 


 


 



 
 

© Siemens COM; Subject to Change without Notice Page 8

 MUSIC customers: Key findings


  








 





 


© Siemens COM; Subject to Change without Notice Page 9

 MUSIC customers: Key findings













  


© Siemens COM; Subject to Change without Notice Page 10

What is mobile Music ?
Who are the mobile music customers ?
How do I bring content to the customer ?
Why mobile music is so important for operators
What are thoughts of the Music industry on mobile music
The problem from customers perspective: DRM
Device roadmap to mass market
Usability
Mobility does not have room for wires

© Siemens COM; Subject to Change without Notice Page 11

music download – what´s behind
End-to-end value chain

Content
Provider Reporting

Master
Content
Music2You

Content Content E-Shop Royalty DRM

Interfacing
Preparation Database Hosting Clearing Encrypt.

Billing Ready-to-
Devices Interface sell
Requesting, Content
Reporting

Service
Provider Delivering

© Siemens COM; Subject to Change without Notice Page 12

What is mobile Music ?
Who are the mobile music customers ?
How do I bring content to the customer ?
Why mobile music is so important for operators
What are thoughts of the Music industry on mobile music
The problem from customers perspective: DRM
Device roadmap to mass market
Usability
Mobility does not have room for wires

© Siemens COM; Subject to Change without Notice Page 13

Some thoughts on: The operator and ARPU

Main music target group “consuming mobile music” is 14 – 30

• Target group will mainly use MP 3 and existing music base
• Potential for spontaneous buying additional mobile music approx 5 € /
month (e.g. limited by available free income)

-> limited potential to increase DATA ARPU in the next years, BUT

• VERY important target group

• VERY important marketing message to the attractive target group
The music story is mainly about marketing (voice ARPU and less data)
If an operator will miss to address this target group, he will loose the
fight for new customers and VOICE and SMS revenue

© Siemens COM; Subject to Change without Notice Page 14

Increase Operator brand value

• Music has very positive recognition in almost all

cultures
• Music is easy to understand
• Music is ideal for promotion in TV and Radio and
even print
• The Vodafone Britney Spear exclusive campaign ?
• The Vodafone Britney Spears tour ?
• The new Britney Spears album exclusive on the
Vodafone download portal?

Music has the best potential in the

consumer market to increases the brand
value of a mobile operator
Music then finally increases market share and
revenue, if there exists a competetive and credible
connection between campaign and reality

© Siemens COM; Subject to Change without Notice Page 15

What is mobile Music ?
Who are the mobile music customers ?
How do I bring content to the customer ?
Why mobile music is so important for operators
What are thoughts of the Music industry on mobile music
The problem from customers perspective: DRM
Device roadmap to mass market
Usability
Mobility does not have room for wires

© Siemens COM; Subject to Change without Notice Page 16

Some thoughts on: The content provider and ARPU

June 2004, Balthasar Schramm, Sony Music

President:
“I see this (SX1 mobile music product launch*) as the
evolution of the walkman and it has huge potential
in the future.”
“ In 3 years I expect 25% of the music market to be
internet downloads and 2/3 of that will be mobile
internet.”

© Siemens COM; Subject to Change without Notice Page 17

What is mobile Music ?
Who are the mobile music customers ?
How do I bring content to the customer ?
Why mobile music is so important for operators
What are thoughts of the Music industry on mobile music
The problem from customers perspective: DRM
Device roadmap to mass market
Usability
Mobility does not have room for wires

© Siemens COM; Subject to Change without Notice Page 18

Some thoughts on: DRM

“Digital rights management”“

or
“Digital restriction management” ?

Why should a customer accept DRM (if there is a choice)?

DVD is copy protected and well accepted BUT -> there existed no better
alternative video format before
MP 3 is very well established, AAC and AAC+ will have a hard time. DRM
might even be a show stopper from consumer perspective.

Owning and Sharing were 2 out of the 4 most important motivations /

success factors mentioned by the interviewed customer base !

© Siemens COM; Subject to Change without Notice Page 19

What is mobile Music ?
Who are the mobile music customers ?
How do I bring content to the customer ?
Why mobile music is so important for operators
What are thoughts of the Music industry on mobile music
The problem from customers perspective: DRM
Device roadmap to mass market
Usability
Mobility does not have room for wires

© Siemens COM; Subject to Change without Notice Page 20

the path to enter the “mobile real music” mass market
Users

SL 45 SX 1
Early UMTS
Early
adaptors adaptors
EDGE

Initiator GPRS
Initiator
Mobile Music Majority &
OTA mass market
MP 3
download Main
market

time

© Siemens COM; Subject to Change without Notice Page 21

 Phone roadmap for the future
Market penetration „Real Music“

*
next

SX1
• EDGE/ UMTS
• Mass market phones
• MP3 player
SL45i • AAC+/ AAC++ player
• GPRS class 10
• Progressive download
• MP3 player
• DRM
• AAC+ support
• MP3 player • Stereo headset
• Progressive download
• MMC slot
• DRM
•32 MByte = 30 minutes
• Stereo headset
• MMC slot time
• 256MB = 16 hours music

© Siemens COM; Subject to Change without Notice Page 22

What is mobile Music ?
Who are the mobile music customers ?
How do I bring content to the customer ?
Why mobile music is so important for operators
What are thoughts of the Music industry on mobile music
The problem from customers perspective: DRM
Device roadmap to mass market
Usability
Mobility does not have room for wires

© Siemens COM; Subject to Change without Notice Page 23

 Music: Convenient usage is key
Fast and Easy
10 sec.

10 sec.
Select song
10 sec.
Click to buy

Convenience:
Progressive download is a must !

© Siemens COM; Subject to Change without Notice Page 24

What is mobile Music ?
Who are the mobile music customers ?
How do I bring content to the customer ?
Why mobile music is so important for operators
What are thoughts of the Music industry on mobile music
The problem from customers perspective: DRM
Device roadmap to mass market
Usability
Mobility does not have room for wires

© Siemens COM; Subject to Change without Notice Page 25

“MOBILITY DOESN’T HAVE ROOM FOR WIRES “

Phone-Car interaction , convenient usage

Playback music stored on phone over car stereo

Control the phone with car controls

© Siemens COM; Subject to Change without Notice Page 26

“MOBILITY DOESN’T HAVE ROOM FOR WIRES “

Home –Mobile interaction , convenient usage

• Playback music
stored on phone over
home stereo GPRS, UMTS
• Remote Control home
DSL, WLAN
stereo with phone
• Synch music between Internet
phone and home Music Download Service
server

© Siemens COM; Subject to Change without Notice Page 27

henning.reich@siemens.com

2000 - Global Product Manager High End Phones

SX 1 AAC+ Hifi Stereo Over the air download (Vodafone and o2)
SL 55 Fashion slider concept
SL45 GSM + MP3 (first GSM MP3 phone)
SL 45i Java 2 Micro Edition (first GSM Java phone)
1998-1999 Director for Siemens SmartCard OS and Cryptography
1992 first global public demo of GSM CSD data with Siemens S3 on Cebit
1992-1997 Development and marketing of mobile computer systems, Nixdorf
1988-1991 university and degree in computer science
1990´s development of Software for Apple 2 and MacIntosh

Married, two children 7 and 9 years old

Hobby: skiing, cycling, mountain climbing

© Siemens COM; Subject to Change without Notice Page 28