Sprint in Content Deals with Sony, Warner Music

Sprint PCS has closed licensing agreements with two leading record labels in a deal that will offer mobile subscribers a few notes from their favorite songs as personal ring tones.

The long distance and wireless carrier is also looking to go beyond ring tones by rolling out a music subscription service, which would enable subscribers to listen to entire songs over a wireless Internet connection.

At a time of declining sales in the music industry, Sony Music Entertainment and Warner Music Group, a subsidiary of AOL Time Warner , are seeking out new revenue streams by licensing their content to wireless carriers for ring tone upgrades and offerings. Wireless carriers, meanwhile, are looking for some return on their investment in network buildouts that can handle voice and a wider variety of data traffic.

The short audio clips from the music labels will be streamed content, a switch from various electronic chirping patterns used in many U.S. mobile phones.

The music subscription service could be risky rollout, one that offers music to an audience already used to listening to music on a range of devices from CD players to portable digital media players.

U.S.-based carriers such as Sprint could be eyeing European and Asian markets for clues to how music services might fare, given how well ringtone downloads have taken hold in those markets. The deals with Sony and Warner Music mark Sprint as the first major U.S. cell carrier to move towards streamed music clips to replace various electronic bird-like ringtones for customers.

For its part, Sony Music Entertainment said it would offer “a wide variety of downloadable ringers created by the Sony Music Mobile Products Group, including animated polyphonic tones, actual clips from songs and specialized sound and voice recordings, available to PCS Vision customers nationwide.

Sprint said the service would be available on select versions of its Java-enabled PCS Vision Phones, which also enable digital snapshots, plus sending and receiving the images via e-mail. Other features in the phones include some kinds of Web surfing, short video clips and streaming some types of audio content.

Sony Music Mobile Products Group last fall acquired Runtones, a wireless
entertainment and technology company, which recently announced a deal to
embed ring tones on Sony Ericsson phones sold in the US,
Canada, and Latin America. All the major carriers are gearing up for rolling out new forms of content, such as Vodafone, which is using RealNetworks’ Helix platform to power mobile content to its subscribers.

Sprint’s licensing deal with Sony Music Entertainment and Warner Music is expected to take the ringtones to another level of content. Warner, for example, is offering what it calls the wireless and music industries’ first streaming-music subscription service. For now, the music clips are 30 seconds only, but Warner Music said it plans to include full-length streamed tracks by artists from Warner Music Group’s renowned, such as Atlantic, Elektra, Warner Bros., Maverick, and Rhino, sometime in July.

By some accounts, Warner Music expects the global ring tone business to be worth more than $2 billion a year, and expects ring tone sales in the U.S. to exceed $50 million.

“The popularity of ringtones has greatly surpassed our expectations, and as
major carriers such as Sprint employ the latest cutting edge technology that
enables us to stream full-length compressed audio tracks, it becomes clear
that the wireless handset market will soon be one of the music industry’s
most important platforms for delivering music,” said Michael Nash, senior
vice president, internet strategy and business development for Warner Music

Sprint and Warner also said they would introduce new “joke-ringers,” based on sound clips from the Rhino Records archive.

The new wireless music service, expected to debut in July, is to be incorporated into Sprint’s pricing package for advanced service customers.

The new Sony and
Warner music content and audio features are part of Sprint PCS Vision’s
Premium Pack, which is available for $15 per month and includes unlimited
access to the PCS Vision Web and text messaging and $10 per month in premium
applications, such as games, ringers, and screensavers.

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