Sony Ericsson leverages Sony music relationships with Orange

Sony Ericsson is working with Sony BMG, the record label, to provide Orange with exclusive multimedia content from Sony artist Jamiroquai on its K600i 3G handset. The agreement follows last week’s launch of the W800i ‘Walkman’ phone, when Jamiroquai front man JK was enlisted to sell the first few handsets at a London store and later gave a private concert for Sony Ericsson guests.

The deal provides further evidence of how Sony is leveraging its full portfolio of consumer electronics and media assets to compliment its mobile venture. The powerful brand associations and social groupings which form around a shared interest in particular genres of music has not been lost on the mobile industry, with all of the major handset manufacturers embedding music capabilities into their handsets.

Uniquely, Sony Ericsson has access to a sister company in the recording industry, as well as the Walkman brand. Through its home entertainment, PC and online downloads business units, Sony is the only company which owns all of the elements required to provide an end-to-end music experience on mobile devices.

Rivals such as Motorola have been working with third parties, striking deals with Apple for access to the iTunes platform and MTV for marketing and content.

Sony Ericsson’s agreement with Orange will provide exclusive video and audio downloads over the Orange 3G network, specifically tailored for the K600i handset. Jamiroquai will also perform at a private concert for Orange’s customers and partners.

Commenting on his recently discovered enthusiasm for the mobile industry and its marketing dollars, JK said: “I’m learning more and more about these innovative new mobile formats every day and I definitely see them as an important way of getting Jamiroquai’s music and visuals out there. 3G is a whole new dimension and I’m delighted to have hooked up with Orange and Sony Ericsson – two leaders in their field.”

“We are extremely pleased to be collaborating with Orange, Jamiroquai and Sony BMG on this exciting initiative,” added Janosch Brengel, Director of Marketing, Sony Ericsson Global Customer Unit (Orange). “Our objective is to add value to Orange’s 3G offering by developing a complete package and maximising the level of integration around superstar video content, a ground breaking European campaign and Orange’s innovative services. The artistry and music of Jamiroquai is both creatively unique and commercially successful and we believe this will have a positive effect on the appeal of the marketing campaign.”

PMN published a research article in December 2004 entitled ‘Mobile industry in search of exclusive content’ (available from the PMN Mobile Industry Intelligence archive – subscription required). In this article, we looked at some of the changes occuring in the value chain as content becomes a more important part of the user experience.

The report observed: “Mobile content has traditionally been procured through one of two main channels – a direct relationship with the media owner (such as Vodafone’s agreement with Manchester United) or through a third party aggregator. Typically larger operators have pursued direct relationships for their most prominent content offerings and relied on third parties for niche areas or more complex services such as games and video. Smaller operators have relied heavily on aggregators to enable them to develop content offerings comparable to Vodafone’s Live, T-Mobile’s T-Zones and Telefonica’s MoviStar.

“Large content owners, such as Disney and MTV, may take a view that their long-term interests are best served by using their exclusive content as a lever to gain more control over the customer relationship. This would mean reserving the best content for their own MVNO offering and forcing network operators to provide them with the capacity to deliver these services. If their content is good enough and their brand strong enough, media owners will gain significant influence throughout the value chain.

“As a result, most aggregators will be frozen out of the high profile content licensing deals they have enjoyed to-date. Only those with global scale (i.e. worldwide distribution relationships with smaller network operators) will be able to offer significant value through relationships. This is already prompting consolidation among aggregators and a greater reliance on the technical services they offer, such as localisation and tailoring content for particular device formats.

“The ramifications of these changes will extend throughout the value chain. Quite simply, those who own content will start to wield more influence. Where previously it would be unthinkable for a content owner such as MTV to be influencing handset design, the media company which has become synonomous with a generation of young adults has already established a relationship with Motorola.”

The partnership between Sony Ericsson, Sony BMG, Jamiroquai and Orange is evidence of how these issues are starting to have a significant impact on the value chain. However, their full significance may not yet be apparent. As our December 2004 report concluded:

“Looking further down the line, the changing dynamics of content provision in the mobile industry will prompt larger network operators to revisit the media merger possibilities first considered during the dotcom boom. With the technical platforms in place to deliver rich content, the rationale for such mergers becomes more compelling.”

We will be exploring many of these ideas in the Day Two session at MEX entitled: “Media opportunities, MVNO partnerships and alternative business models.” Kristoffer Aberg, Senior Interaction Designer at Sony Ericsson, and Yves Christol, Head of Device Requirements at Orange, are also speaking at MEX.

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