Making Mobile Music More Social

Vodafone’s signed a distribution deal with Warner Music, making it one of the first mobile operators to offer DRM-free music from all the major record labels. The operator’s already signed up Universal Music, Sony Music and EMI.

Although the agreement with Warner Music isn’t earth-shattering, the removal of restrictions from Vodafone’s catalogue is a further step in its efforts to offer a distinct music service. I expect the operator to expand its range further by forming agreements with independent labels.

But I think Vodafone — and other networks — need to do more. For a start, they have to step up the marketing of unlimited music. There’s clearly a demand for such services. In our survey of mobile Internet usage among young adults, almost one in five people said they’d like access to unlimited music (see www.mobileinternetreport.com). As yet, few people pay for mobile content — only 12 percent of respondents to our survey paid for music on their phone.

To add to this, Web-based services like Spotify are stealing the limelight. Spotify’s unlimited music streams have struck a chord with a growing and loyal group of users — about 6 million so far, 2 million of them in the UK. With support for both the iPhone and Android platforms, Spotify is venturing into mobile music. Other music providers are (or should be) concerned about the effect on their businesses.

I think operators will have to offer more than just music. They need to emphasize the social aspect of music and provide an integrated social experience of music across the Web and the mobile phone.

Orange UK is trying to do this with its Monkey service, and Vodafone’s doing well in connecting music lovers through its relationships with MTV for Vodafone Soundbites and MySpace for Vodafone Reporter. In my view, O2’s in the best position in the UK to offer subscribers an unrivalled music experience, thanks to its sponsorship of music venues and events.

Recording artists are changing the way they interact with their fans, too. When I went to see Coldplay, we were all given a CD of the band’s music at the end of the evening. I presume some of the cost was offset by ticket sales, and it’s a great way to get music into the hands of people that have shared a common experience.

Music’s bound to stay a central focus for the mobile industry. Over the coming year we’ll see more DRM-free offerings that will eventually lead into unlimited bundles similar to Orange’s Musique Max service in France. Many people still don’t really understand unlimited services, so providers will have to educate potential customers.

But unlimited access to music alone won’t be enough. The successful services will be those that offer a combination of music and the social interaction that goes with it.