Tuning in: How to make money from mobile radio

Broadcast radio on mobile phones has been around for a long time now. Living in the shadow of sexier applications like Mobile TV, its potential has consistently been overlooked. Martin Orrell thinks the advent of innovative new services like Digital Music Download and evolving consumer listening habits, mobile radio is being released from its shackles …

Listening to the radio via the mobile phone has quietly been building a steady following. 7.8% of the UK adult population (aged 15+) now listens to the radio via mobile phones, up 24% year on year. In addition, a quarter of 15-24 year old (1.6 million) mobile phone owners listen to the radio in this way [Source: RAJAR].

In the past, radio stations, content aggregators, handset manufacturers and mobile operators have overlooked the massive commercial potential of delivering radio services through the mobile phone because they couldn’t foresee a viable business model. This is beginning to change.

Come the summer, UK mobile consumers will have full access to the world’s first broadcast Digital Music Downloading (DMD) service to mobiles. DMD differs from normal 3G mobile music download services as it offers the ability to interact directly with live radio broadcasts, rather than having to search and download tracks proactively. The technology enables digital radio listeners to instantly purchase tracks as they are broadcast directly to mobile devices, with the cost debited directly from their mobile phone account.

Markets for DMD
The digital download service will revolutionise the way people listen to and buy music and creates an exciting business model.

The market appears to be there. In DMD pilot trials 83% said they were keen to use a DAB mobile device in the future – and during the trial purchased an average of seven tracks per week, priced at £1.25, significantly more than predicted.

DMD also appealed strongly to women, especially those not currently used to downloading music. We’re not just talking about appealing to the iPod generation here but attracting those who are less familiar with downloading music.

While listening or having listened to a track on the radio the user may select to purchase by a simple keypress. The track has already been stored on the mobile device while they were listening to the radio. The purchase process simply charges the users mobile account and provides a key to unlock the track.

The technology behind the DMD service has evolved from existing DAB-IP mobile TV based platforms. The challenge has been to ensure a positive user experience by overcoming potential problems with inconsistent signal quality and lost data. The technology has advanced to the point that it can work with existing network coverage and reconstitute a track even if a number of information blocks are lost.

"Digital Music Download will revolutionise the way people listen to and buy music …"

Evolving radio
Radio is and always will be a source of music discovery for consumers but looking to the future traditional radio as we know it is going through something of a revolution.

Digital technology is turning commercial broadcasting upside down. Radio stations are trying new approaches and re-thinking traditional ideas of music broadcasting, because the younger generation is demanding much more.

We’re seeing a migration from generic services to much more personalised services.

In the mobile world this will start to become an integrated part of future products. The main technical issue for developing potential services like this is getting the handsets to support them. This requires handset manufacturers and operators to work together.

One new challenge is how to generate a commercially viable business model around a mobile radio user community.

While you might think mobile multimedia services of this type are a long way from commercial viability, they’re far closer than you’d think.

As other radio stations, content aggregators, handset manufacturers and mobile operators around the world begin to appreciate the massive potential of the DMD market and commercial viability of mobile radio services, I expect to see many more innovative mobile based digital radio propositions.

Handset vendors and operators willing to invest in building user experiences that inspire consumers to seek out more content will be in the strongest position to influence the future of mobile services. There is no better time to start upgrading the user experience to stimulate additional revenues and higher ARPU driven by mobile consumers who are inspired to consume.

Martin Orrell is General Manager of Digital Multimedia Broadcast at The Technology Partnership. TTP was involved in creating the enabling software for UBC Media’s DMD service.

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