1. Mobile music Elina Vartiainen 19.4.2005 T-109.551 Research Seminar on Telecommunications Business II Spring 2005

2. Agenda Introduction Technical background Business models  Pre-conditions  Value chain participants  Potential revenue sources  Business model scenarios Case: Vodafone Live! Conclusions

3. Introduction Developing into a big business opportunity in different corners of the world Variety of products and services available Networks are speeding up

4. Technical background Two audio format concepts: natural and synthetic audio

5. Technical background File formats for natural mobile audio

6. Technical background Mobile audio formats for different services

7. Technical background Formats for synthetic mobile audio

8. Technical background Different connections

9. Business models Pre-conditions:  Consumers are accustomed to mobile music  Music consumers and wireless pioneers are congruent  Little input functionality for linear content is required  Formats and rendering devices are already available  Audio content is digitally available as compared to books and graphics

10. Business models Value chain participants:  Content owners  Aggregators  Carriers  Handset manufacturers  Consumers

11. Business models Potential revenue sources  Airtime sharing  Promotions and sponsorship  Transaction-oriented revenues  Content aggregation and subsription  Levies and taxation on devices or bandwidth

12. Business models Scenarios:

13. Business models First scenario: Free peer-to-peer distribution

14. Business models Second scenario: Music service provider

15. Business models Third scenario: Subscription models

16. Business models Fourth scenario: Superdistribution

17. Case: Vodafone Live! 3G music download service Launched in November 2004 with 500 000 music tracks in 13 markets Tracks in AAC format Cost of downloading a full track around €1.5 depending on the country, also monthly packages Content protected by DRM

18. Conclusions Compatibility must be ensured to enable the success of mobile music 3G and especially WLAN offer fast connections in the future Most preferable revenue source for mobile music are generated from transactions  With DRM: subscription plans and superdistribution  Without DRM: promotions, sponsorships and license of mobile music services