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Music, wireless intersect to tune in on revenues

“You just heard `Turn off the lights’ by Frank de Jojo.”

For $1 per message, wireless users in the United States can identify virtually any song they hear, whether it’s on the radio, in a supermarket or at a club. Currently available through AT&T Wireless Services Inc., users can call #43 on their mobile phone, hold the phone up to the source of the music, and then seconds later receive a text message identifying the musician and the name of the song. Frank de Jojo’s hip-hop track “Turn off the lights,” for example.

Musicphone Inc. and Shazam Entertainment Ltd developed AWS’ new service, launched in April. The two companies are among a variety of players looking to cash in on the intersection of music and wireless.

The relationship between wireless and music goes back to the introduction of ring tones. Rather than the standard “ring ring,” ring tones allow users to personalize their phone with melodies from Britney Spears to Mozart. Although ring tones are a seemingly trivial offering, the industry nonetheless generates $3 billion worldwide. Thus, wireless players are looking for other ways to cash in on the mobile music lover.

Such offerings span the gamut. Some early movers are selling specialized wireless devices that can download full digital music tracks over the air. Some are peddling ring-back tones, which replace the standard “ring ring” callers hear with tunes or personal greetings. And some are selling music dedication services that can be sent in the form of a tuneful call to friends and family. But one area in particular has generated a significant amount of recent interest-music recognition.

Musicphone and Shazam join MusiKube, M1, Musiwave, Gracenote, Philips Research and others in the music-recognition scene. Such companies are hoping to make money by allowing wireless users to identify-and then purchase-the music they like.

“Our whole solution is about interest capture,” said Sunjay Guleria, MusiKube’s vice president of marketing.

Guleria explained that MusiKube’s forthcoming music-recognition service will include much more than simply identifying a song name and musician. MusiKube’s service will help users track their music tastes through an online account fed by information from CD bar codes, store purchases and music IDs. Wireless users then will be able to purchase a variety of items related to their favorite musicians including fan-club updates, ring tones, screen savers, CDs and concert tickets.

“There’s very few people putting it together,” Guleria said.

Musicphone, through its MusicID service with AWS and Shazam, is looking to offer similar services. Beyond the $1 per message music identification service, Musicphone said it plans to sell related items including ring tones, CDs, full songs, song dedications and song recommendations. Thus, Frank de Jojo fans could purchase the “Turn off the lights” ring tone, send a clip of the track to friends and family, and ultimately buy Frank de Jojo’s CD.

Shazam and M1 offer similar services. In Europe, Shazam’s music-recognition service works through the short code 2580, and allows users to “tag” their favorite songs and then buy the corresponding ring tone or CD. M1 offers its music-recognition service called Point in Singapore, and also includes the sale of associated ring tones and CDs.

Musiwave is one of the more interesting players in the space. Besides its music-recognition service, the company also offers full song downloads through a deal with SDC Java DRM and Coding Technology as well as ring tones combined with animations, streaming music videos, real tunes and ring-back tones.

On the technology side, Shazam competes with Gracenote and Philips Research in the actual process of identifying music. Founded in 1998, Gracenote manages a database of more than 35 million digital music tracks and sells its music-recognition technology to computer makers, online music companies and others. Such customers use the technology to list song choices on digital CD players, as well as to track and manage the sale of digital music. Gracenote earlier this year teamed with Philips Research to enter the wireless space. Philips offers a music “fingerprinting” technology that can identify songs in as few as three seconds, even in noisy conditions-potentially key for mobile users.

“We feel really confident in the technology,” said Craig Palmer, Gracenote’s chief executive officer.

However, Palmer echoed others in the music-recognition area by asserting that such technology was only part of a larger opportunity.

“It’s about a whole set of integrated offerings,” he said. “Once you link to that user you need to provide the ability for that user to consume all the things they’re interested in. Music recognition is interesting from a novelty perspective, but you need to link it to something real.”

Gracenote’s technology is available through Musiwave’s music-recognition service for Spanish carrier Amena and Portuguese carrier Optimus as well as through KTF in South Korea.

“Asking consumers to step up and pay a buck to know the name of a song is just the first step,” said Linda Barrabee, senior wireless and mobile services analyst at Yankee Group.

Although music recognition is an interesting service, Barrabee said, it will only survive as part of a larger offering based around wireless access to music. Further, Barrabee said music recognition likely will remain a minor offering due to the marketing costs needed to generate user interest as well as the challenges associated with transitioning the service from a per-use application to the preferred model of a reoccurring monthly subscription.

“It’s still sort of early,” Barrabee said.

MusiKube’s Guleria expressed confidence that the company’s service would gain traction. He said music recognition, tracking and the resulting sales would create a sustainable business model. However, MusiKube has already run into difficulties. The company was scheduled to launch its own music-recognition service in the United States earlier this year, but had to delay those plans due to pricing issues and revenue-sharing negotiations among record labels, wireless carriers and text-messaging companies. Guleria said MusiKube’s service would launch in August, and that it would soon be available through multiple carriers.

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