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The Kansas City Star, Mo., David Hayes Column: Sprint's Music Store Gets Kudos

Posted on: Thursday, 1 June 2006, 18:00 CDT

By David Hayes, The Kansas City Star, Mo.

May 23--A research firm has some good news and some bad news for Sprint shareholders and executives.

First off, mobile phone consumers like Sprint's wireless Music Store a lot more than a similar service offered by Verizon Wireless.

The bad news is that consumers think that both Sprint and Verizon charge consumers too much to download music.

Boston-based Strategy Analytics projected that the wireless music download services would never take off if the mobile companies didn't cut their prices.

Sprint launched its music service last fall, charging consumers $2.50 a song.

Verizon Wireless countered in January, launching the V CAST Music service. Verizon sells songs for $2 each.

Both services let consumers download a song both to their phone and their personal computer.

Sprint consumers have downloaded more than 3 million songs since the service was launched, said Aaron Radelet, a spokesman for Sprint.

The research study found that Sprint's Music Store outscored Verizon's service "by a massive 21 percent."

The Sprint service was preferred to V CAST Music for both "perceived network performance" and "ease-of-use," according to the study.

"Strategy Analytics has identified significant levels of consumer interest in mobile music services, and the current services -- especially Sprint Music Store -- meet or exceed user expectations in terms of performance and convenience," Paul Brown, wireless analyst for Strategy Analytics, said in the report. "Price remains a considerable barrier to acceptance."

The Strategy Analytics study found that consumers were willing to pay a 35 percent premium to download music to their phones. The standard price for online music is just under $1, which means the wireless companies would have to cut their prices to $1.35.

"The current 100 to 150 percent premiums charged by the main operators make adoption of these services highly unlikely," Kevin Nolan, director of the research firm's Advance Wireless Laboratory, said in the report.

Paying bills online

Here's the latest way the Internet has changed our lives.

More than two-thirds of online U.S. consumers use the Web to pay at least one bill a month, according to a study by The Marketing Workshop and Harris Interactive.

The study, completed for CheckFree, an electronic bill payment service, found that 37.5 percent of bills are paid by check, while 35 percent are paid electronically.

"Online payments are replacing check writing as the way to pay bills," according to the survey of 2,230 Internet households.

Consumers said they paid bills online to make sure the bill is paid on time, for convenience and because they receive e-mail reminders to pay.

About 20 percent said they didn't pay bills online because of security concerns.

More on wireless...

Not that a few days here or there is really going to matter to consumers, but in the marketing war, Verizon Wireless won one on Monday.

Last week, Sprint said it would be the first to offer the Treo 700p, a smartphone that builds on the legacy of the popular Treo 600 and Treo 650.

However, on Monday, Verizon Wireless became the first to actually offer the phone to customers.

Verizon began selling the phone on its Web site for $500, a hefty price that includes a requirement for a new two-year contract.

Sprint last week said it would begin selling the 700p by the end of the month. Sprint is planning to charge $400 after rebates and contract requirements.

In other news, Verizon announced Monday that it would sell another smartphone, this time a model from Motorola.

The Motorola Q, which will be in stores May 31, runs on the Microsoft Windows Mobile platform. The phone, which has most standard smartphone features, will sell for $200 after rebates.

Also on Monday, Kansas City-based Handmark said the Motorola Q would come bundled with the company's Pocket Express news, information and entertainment service.

"With more than a million users added in 2006, Pocket Express will become the favorite wireless information service for Q," said Douglas Edwards, Handmark's co-founder.

Bits & Bytes appears on Tuesday. To reach David Hayes, senior technology writer, call (816) 234-4904 or send e-mail to dhayes@kcstar.com .

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Copyright (c) 2006, The Kansas City Star, Mo.

Distributed by Knight Ridder/Tribune Business News.

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Source: The Kansas City Star (Kansas City, Missouri)

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