Wireless operators may be busy beefing up their networks to support video, but music is clearly the service that is catching their eye (ear?) the most in the US.
When it comes to promotions, partnerships and zero-rated app offers, music is the main focus in the US today. Sprint Corp. (NYSE: S) has a partnership with Spotify for a free six-month trial for its customers. AT&T Inc. (NYSE: T) inked a deal with Beats Mobile, which we should hear more about soon, now that Apple Inc. (Nasdaq: AAPL) has acquired Beats. And this week, T-Mobile US Inc. added six additional music partners to its toll-free Music Freedom service, which it says has seen 7,000 terabytes of music streamed since its launch in June. (See T-Mobile: You, Seven Nights & the Music, AT&T's Strategy Boss Puts Content First, Apple Confirms Beats Buy for $3B and Sprint Plans More Bundled-Content Offers.)
In response to operators' growing interest in mobile music, Opera Software ASA 's Skyfire division today added streaming audio optimization capabilities to its Rocket Optimizer software, initially built to optimize mobile video traffic. As support for the popularity of mobile music, the company cites a Strategy Analytics Inc. study that says 77% of mobile users listen to music on their phones -- 70% at least once a week.
Operators are using mobile music as a way to differentiate their service and increase customer loyalty, and it's an approach that makes a lot of sense. Offering video as a toll-free app that doesn't count against the data cap would be a non-starter: The network would crash under the weight of it. Streaming music is a more network-friendly, lower bit-rate app that resonates with a wide range of customers. It's the low-hanging fruit.
What's more, they are finding willing partners in the over-the-top music services. In the past, operators have tried to pave their own way with mobile music -- attempts that ultimately failed, with the exception of Cricket's Muve Music. As a partner service offering, they're finding their customers are actually quite interested. (See Will AT&T Muve to the Music? and Comes With Carriers?)
That said, it's still a service operators will need to keep an eye (ear?) on, as listeners have been known to stream music for hours on end. It can still be a bandwidth-buster, and the economics make less sense the more it's used over LTE. (See 10 Ways to Mind the Mobile Data Cap.)
It'll be interesting to see what the next mobile app is to catch operators' interest (Games? Enterprise functions? Photos?), but for now, music is clearly the sweet spot.
— Sarah Reedy, Senior Editor, Light Reading