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AT&T Wireless Launching Music Service

Posted on: Tuesday, 5 October 2004, 06:00 CDT

LOS ANGELES - In the first foray by a U.S. wireless carrier into the online music market, AT&T Wireless is launching a service that lets subscribers buy songs using their cell phones and later download them to a computer.

Until now, mobile music sales have centered on ringtones, the song snippets used to customize ringer and other sounds on mobile phones.

At Tuesday's launch, mMode Music Store will offer roughly 750,000 tracks priced at 99 cents each. Full albums will start at $9.99.

To buy songs on the service, an AT&T Wireless customer would use their phone's browser screen to search for tracks and, on some phones, listen to 30-second song samples. The mMode store will also sell ringtones.

Purchases would be billed to users' monthly wireless phone bill, with customers downloading songs over the Internet from a Web site in the Windows Media Player format. The files and could then be burned onto CDs or transferred to portable digital players.

"From our view, it really turns the mobile phone into kind of a remote control for buying music," said Sam Hall, AT&T Wireless' vice president of mMode Services in Redmond, Wash. "Our intent is to have the mobile phone become the discovery platform."

The skeleton of the music store was developed by Loudeye Corp., which manages and distributes digital music and video.

AT&T Wireless is also marrying the service with its Music ID feature, which can recognize songs played into a phone's speaker and send text messages to users with information on the track.

That the nation's second-largest wireless carrier would venture into selling song downloads signals promise in the digital music market, said Phil Leigh, an analyst with Inside Digital Media.

"For AT&T, it's a good way to get started," Leigh said. "It enables an impulse purchase that might otherwise be lost, and it also has a novelty appeal, but it's no real threat to Apple yet."

Apple Computer Inc.'s iTunes Music Store remains the market leader in individual downloads. But AT&T Wireless' concept has potential to grow as increasingly powerful phones with hard drives capable of storing large song files enter the market.

AT&T Wireless expects its service to expand, including the ability to download songs directly to the phones.

But whether the market can support such an offering remains to be seen, said Josh Bernoff, an analyst with Forrester Research, Inc.

"Just what we need, another music store," Bernoff said. "We really have way more suppliers here than the market will bear, this is a very strange idea to think that we need another one."

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