Dr. Mac at SXSW 2007 - Come Together: Mobile Phones and Portable Music Players Converge

by , 8:30 AM EDT, March 19th, 2007

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Music, movie, and multimedia fans and pros flock to Austin, Texas each March to learn and share knowledge at the South By Southwest Festival and Conference. The last session I attended on your behalf, gentle reader, was a panel discussion entitled, " Come Together: Mobile Phones and Portable Music Players Converge." I thought, with the imminent release of the Apple iPhone - which I expect will be the ;berphone when it comes to music (and other stuff) - there might be some interesting insights offered in this session.

But first, before I tell you about the session, allow me to introduce the illustrious cast of characters:

• Ted Cohen (moderator): Managing Partner, Tag Strategic
• Dave Ulmer: Senior Director of Marketing, Motorola
• Rob Hyatt: Executive Director, Cingular
• Matt Schwartz: Manager of Music Content Operations and Business Development, Verizon
• Adam Mirabella: Senior Vice President/General Manager Global Digital Group, SonyBMG
• Matt Adell: VP of Music Services, Napster

As you can clearly see, many viewpoints were represented by this diverse bunch. Ted Cohen, the moderator, is some kind of strategic consultant for this market segment. He was quite well-versed in all aspects of the phone/music convergence phenomenon, and seemed to know all five panelists and about half the audience members personally.

Dave Ulmer, and to a lesser extent Rob Hyatt and Matt Schwartz, brought the handset maker's perspective, with Hyatt and Schwartz also representing the standpoints of two rather large wireless operators.

Adam Mirabella and Matt Adell came at it from a different side. Mirabella speaks for one of the largest music producers in the world, representing a multitude of multi-gold and multi-platinum artists; Adell represents the "new" Napster, which offers a subscription music package with downloads for around US$15 a month.

I'd like to point out that Adell's viewpoint is mostly irrelevant to most of us. First and foremost, neither Napster nor its Napster To Go service are compatible with Macs or iPods. And since it uses Microsoft's DRM (digital rights management) scheme, it's unlikely to ever matter to Mac users. That alone is a deal-breaker for most of us. The second reason it's irrelevant for me is that when you stop paying the monthly subscription fee, any and all music you've downloaded ceases to function. (That said, if and when a subscription service compatible with Macs and iPods becomes available, I will almost certainly give it a try, even knowing that any music I download will disappear if I stop paying the monthly ransom... err, subscription fee.)

Moving right along, the first question addressed by the panel was whether or not musical ring tones are here to stay. More specifically, the question was whether vendors well be able to sustain their current unreasonably high prices (e.g. $1.99, $2.49, even $2.99) for what amounts to a download of only a part of a song.

The consensus was that ringtones and ringback tones (songs callers hear when they call you) are here to stay. Young people like them and use them to make a statement about who you are and what you like. But most of the panel agreed that the artificially high prices couldn't last much longer. Most of them seemed to think the ring and ringback tones would morph mostly into components of a bundle. So, for example, rather than paying a couple of bucks for a particular tone, you'd get it free when you bought a track, album, or video by the artist. Napster's Adell, as might be expected, thought ringtones would eventually become part of subscription services on phones and Hyatt agreed.

A brief aside: It seems to me vendors won't be able to sustain the artificially high ringtone prices much longer anyway due to free and inexpensive ringtone-making software as well as online services like Phonezoo, which allow you to create your own ringtones and send them to your mobile phone at no charge.

The discussion then turned to DRM – digital rights management – and whether it would remain ubiquitous in the future. The answer seemed to be that it's becoming more popular among independent music producers and artists but that big content owners (e.g. the major labels) are unlikely to allow widespread distribution of unprotected songs anytime soon.

Next came a discussion of user interface issues, which naturally led to a discussion of Apple's iPhone and what it would mean to the industry. But first, Dave Ulmer pointed out that he had seen research that showed that for every push of a button on the phone you lose 50 percent of the customers. So the panel seemed to agree that they had some work to do on their user experience with Apple about to enter the fray.

More specifically, Dave Ulmer says he thinks iPhone will be a positive thing for the industry as a whole. He believes the iPhone will help the phone/music player market take off. He pointed out that it took Apple to make the MP3 player market viable and he expects the iPhone to do the same, creating a "halo effect" that will expand the market for music-playing phones for all handset manufacturers and wireless network operators.

Rob Hyatt, being from Cingular (Apple's wireless carrier partner in the iPhone project), declined to say much about it.

Matt Schwartz, from Verizon, says that Apple has the ability to move markets and that the iPhone validates the point that phones and music players belong together. He also noted that they'll (they being everyone other than Apple/Cingular) will have to improve their user interfaces to compete.

Adam Mirabella, from SonyBMG, said he's thrilled. He loves iTunes and believes this will be good for SonyBMG by making the iTunes user aware of the mobile phone/music player category and convert iTunes fans into phone/music player fans, which he thinks will be a good thing for his company and its artists.

So, at the end of the day (and near the end of the session), it seems that almost everyone loves the iPhone, including its competitors (i.e. Motorola and Verizon).

And that was pretty much it for this session, but I did want to mention one other interesting factoid I heard earlier: Can you name the number-one camera manufacturer in the world? How about number-two? Well, according to Dave Ulmer, that would be Nokia and Motorola. It makes sense when you think about it but I didn't know it before.

And that's all I've got for you this year. Be sure and tune in next March, when I'm sure The Mac Observer will have more exciting SXSW coverage for you.