Ask Sprint and Verizon if their new music download services to mobile phones really competes with Apple’s iTunes and they will probably respond “No.” But iTunes $.99 download fee set an expectation in music lovers’ minds about what a reasonable “download” price would be.
Market research firm Strategy Analytics studied the phone companies’ offerings and found that “Sprint charges $2.50 per song for over-the-air downloads, which is two-and-a-half times more than the cost of purchasing a song from Apple's iTunes online music store and downloading it to a desktop computer. Verizon Wireless' price for over-the-air downloads is slightly less and it offers even less-expensive prices when music is downloaded via a PC.
Both pricing schemes are far higher than end users are willing to pay, the study concluded.
‘Our research suggests that users are willing to pay a premium of around 35 percent for the convenience of downloading tracks to both their wireless devices and PCs -- subject to reliable network performance,’ Kevin Nolan, head of the research firm's Advanced Wireless Laboratory, said in a statement. ‘In our view, the current 100 to 150 percent premiums charged by the main operators make adoption of these services highly unlikely.’"
Competition, like beauty, is in the eyes of the beholder, i.e., customer.
“Cellular Music Offerings Doomed by High Prices” David Haskin, InformationWeek Daily 5/22/06