Forget glow-in-the-dark faceplates, see-through battery packs and flashing antennas.
When it comes to marketing to younger wireless users, it’s all about the music. Instead of monophonic, eight-note ringtones, today’s phones can double as a mini-jukebox, with the ability to download and store hundreds, sometimes thousands, of entire tunes onto a memory card.
While many high-tech companies scramble for a piece of the wireless music pie, Nokia is using branding to try to rise above the din. Last week, the Finnish company announced a deal to put its name on the theater portion of a $1 billion development near Staples Center in downtown Los Angeles that’s being proposed by entertainment and development company AEG. The six-block, 4-million-square-foot project would house the 7,000-seat Nokia Theater Los Angeles, plus a nightclub featuring live music and an open-air plaza.
It would mark the second time Nokia has aligned itself with a mid-sized music venue. Nokia Live at Grand Prairie, a 6,350-seat auditorium outside Dallas, opened in February 2002, and a third Nokia venue, on the East Coast, is expected to be announced in the next few months.
“Music is one of the constants in the lives of young people,” said Jo Harlow, vice president of marketing for Nokia Corp. “One of the challenges is that every (wireless company) uses music, whether it’s in advertising, ringtones or a competition for music giveaways.”
Consumers spent $3 billion worldwide simply buying ringtones last year, according to one estimate. And it’s not just users and carriers that stand to benefit from wireless music sales.
“The record labels are very excited” about recent growth in music downloads, said Richard Doherty, research director for the Envisioneering Group. In addition to cutting overhead, providing downloads to wireless carriers allows labels to dispense with the hassles and costs of typical Internet sales.
“People with cell phones already have an account” so they can be billed, Doherty said. “That’s a very secure economic platform to deliver to.”
Also, downloading tunes doesn’t tax the carriers’ infrastructure the way typical phone conversations can because music is received via a progressive download, not continuous streaming. Packets are sent in spurts, so if the download is interrupted, it can be completed later.
“It’s a very low-cost distribution network for the carriers,” said Doherty.
Nokia wouldn’t disclose terms of the Los Angeles deal, except to call it a “multi-year, multimillion-dollar” agreement.
“Putting our name on venues where the most popular up-and-coming acts play delivers a perception of the brand as being in touch with youth culture today, and that is what we want to do,” said Harlow. “There’s no question that by having our name on these theaters, we’ll be able to interact (with the youth market) in a way we’ve never been able to before.”
Meanwhile, carriers continue to search for other ways to push value-added features to younger users while at the same time aligning themselves with bands, movies and TV shows favored by that market. Last year, AT&T Wireless Services Inc. subscribers submitted an astounding 1 million text-message votes to help choose the winner on “American Idol.” AWS and Nokia followed up on that success by marketing “American Idol” phones featuring messages, pictures and tones of the show’s contestants and judge Simon Cowell.
The popularity of the promotion shocked analysts, and demonstrated to the industry the potential that exists in the fingertips of the nation’s young wireless users.
As the popularity of downloading music continues to grow, though, so do concerns about the capabilities of infrastructure to handle it. Difficulties downloading tunes may lead consumers to move on, leaving carriers and content providers with a huge lost opportunity.
“If music demand were to double this year,” said Doherty, “the networks couldn’t handle all that during peak voice times. There’s optimism for the system growing, but there’s also a feeling of hope that it doesn’t grow too fast.”
