SAN FRANCISCO—Independent music aggregator Digital Rights Agency lashed out at Sprint Nextel Corp., blasting the carrier’s full-track download service for its “failure to include independent record label catalogs.”
DRA said it sent a letter to Sprint Nextel Chief Executive Officer Gary Forsee expressing its concerns, claiming that it has attempted negotiate directly with Sprint for the last two years.
“It’s simply unacceptable that Sprint continues to exclude independent labels from its full-track download service,” DRA Managing Director Tuhin Roy said in a prepared statement. “It’s difficult to understand how Sprint will compete with services like iTunes or Verizon’s Vstream (sic) if, 25 percent of the time, it will be unable to deliver the music than (sic) its subscribers are looking for.”
Roy apparently was referring to Verizon Wireless’ Vcast Music service.
Sprint spokesman Aaron Radelet acknowledged the full-track service carries offerings from only the four major labels—EMI Music, Sony BMG Music, Universal Music Group and Warner Music Group. However, Radelet said, Sprint has relationships with several independent labels for ringtones and other forms of mobile music.
“Sprint is currently in negotiations with several providers of independent music, and plans to announce relationships (for its full-track service) in the near future,” Radelet said. Sprint also is working to access wares from independent artists through major labels, which often act as distributors for smaller companies, he said.
DRA’s complaint highlights a key concern among carriers looking to compete with Apple’s iTunes, Jamster and other digital music services. Sprint became the first U.S. carrier to launch a full-track service late last year with a conservatively priced dual-download offering, allowing users to purchase songs from their PCs or handsets for $2.50 per tune.
Verizon, by contrast, is courting the mobile music market more aggressively, charging $2 for songs downloaded directly to a handset and $1 per PC download. Sprint Nextel and Verizon remain the only U.S. carriers to offer full-track downloads.
Whether any wireless operator can create a sustainable business model for full-track services is questionable, however. Consumers’ willingness to pay a premium for over-the-air music downloads is still unclear, particularly in light of the success of iTunes. Also, there appears to be little room for a new link in the value chain of digital music downloads given the slim margins Apple and other providers are seeing in the space.
Sprint Nextel recently announced its subscribers downloaded more than 1 million full-track tunes. However, the carrier did not say how many of those downloads generated revenues.
