USD 1.25 magic

Usable Products Company (UPC), the New York-based consultancy which has established a reputation for its excellent research into the usability of mobile media downloads, has published the latest findinds of its ‘Key drivers’ study. According to Scott Weiss, CEO of UPC, the study found US consumers reject music services which charge more than USD 1.25 to download full tracks to their mobile or other devices.

“Our findings are a wake-up call to Verizon [which charges USD 1.99 per track] and Sprint [USD 2.50], among others, who charge far too much for media downloads to multiple devices,” said Weiss.

The six month study also looked at consumer attitudes to ringtones, event tickets, wallpapers, games and video.

Other interesting findings included a reluctance among consumers to pay an additional fee to access music on multiple devices. Just 2 percent of survey respondents were willing to spend up to 30 percent more to access the same music file across a number of different platforms (e.g. their home PC and their mobile phone).

Comments made by the survey respondents, particularly among the youngest users, indicated their current experiences with MP3 players and PCs have significant influence on their approach to the mobile environment.

“If I can get it online for 99 cents, I wouldn’t buy it on my phone for 3 dollars,” said one Chicago-based user in the 14 – 17 age bracket. A customer in the 25 – 25 group from the same city said: “If I had to choose between buying an iPod or a phone that plays music – but I’d have to pay more for the music on the phone – I’d just buy the iPod.”

These findings reinforce the view that Apple has set the early benchmark for mobile music download services, despite the relatively small size of its customer base in comparison to that of the major handset manufacturers. Nokia recently claimed it was the world’s largest manufacturer of MP3 players by virtue of the number of phones it ships with music capabilities, but it appears the user experience of Apple’s services is enabling it to command an influence far in excess of its customer numbers.

The mobile industry is caught in a curious ‘Catch 22’. Handset manufacturers are moving rapidly to include music playback in a wide range of devices, while network operators are struggling to find a pricing model which will allow them to maintain their existing, highly valuable ringtone business and still generate new revenue from full track downloads. Some operators are currently charging twice as much for ringtones as for full track downloads, and almost all are charging more than PC-based services such as Apple’s iTunes.

In another part of the study, UPC found that 75% of espondents were ‘interested in’ or ‘very excited’ to be able to purchase event tickets from their mobile phones.

This provides evidence of the opportunities for operators and service providers to support communities built around music affinity. While the price of full track downloads may have to fall to generate mass market interest, the mobile industry has an opportunity to deliver complimentary services, such as mobile ticketing, which will generate revenues unique to the mobile environment.

“Key Drivers to Media Downloads” reports on advertising efficacy, bundling and promotion strategies, and consumer response to different types of media offerings. Three age-bracketed focus groups were conducted in each of four cities: San Francisco, Chicago, Dallas, and New York. In total, more than 1,000 survey responses were collected from ten key US cities.

Further information from the UPC web-site.

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