Sony Ericsson's PlayNow Arena: 1 million, DRM-free songs on Monday
by Thomas Ricker 
posted Aug 22nd 2008 at 3:07AM
STOCKHOLM (Dow Jones)--Sony Ericsson Friday announced the launch of PlayNow Arena, an Internet site that gives users access to mobile music, games, and applications.
The phonemaker's attempt at increasing its exposure to the lucrative mobile music and gaming market is seen a key step for the company that made its mark in regions such as Western Europe with its music-focused sub-brand Walkman phones and camera-focuses Cybershot handsets.
The service will first be rolled out in the Nordic countries on Monday morning, and will initially include one million tracks from the largest global music labels, including Sony BMG, Warner Music, and EMI.
All tracks will be DRM free, or without digital rights management, meaning users can move the files around between devices and convert them an unlimited number of times.
The site will expand to other European countries later this year and be global in 2009, ultimately selling five million tracks.
Martin Blomkvist, Sony Ericsson's head of content acquisition and management said in a recent interview that offering digital music without rights or copying restrictions and games will help pull users toward the new site, providing a larger separate revenue stream, and stimulate handset sales.
"If we together don't work for finding ways to take away the obstacles of legal downloads, then, this industry from a digital perspective is going to die," Blomkvist told Dow Jones Newswires in an interview Wednesday.
Sony Ericsson, the joint venture between Sweden's Telefon AB L.M. Ericsson (ERIC) and Japan's Sony Corp. (SNE), has some 200 million handsets capable of playing mp3 music files in the market already.
All tracks sold in Sweden will cost SEK9 with credit card, and others are expected to cost on par with what rival Apple Inc.'s (AAPL) charges for a song track on its iTunes site, such as $0.99 in the U.S. and EUR0.99 in Europe.
Research firm Gartner expects the global mobile music industry to be worth $13.11 billion in 2011, far above the $4.43 billion in 2008. The gaming industry is expected to grow to $6.31 billion from $4.51 billion during that time.
CCS Insight analyst Paolo Pescatore said offering DRM-free music is a clear differentiator, setting it apart from protected files sold by rivals Nokia (NOK) and Apple.
Still, Blomkvist said that even with reasonable buying terms with the biggest music labels, after paying taxes and operators for using their systems, Sony Ericsson would hardly profit from selling music.
"Had we only done music, we wouldn't have done this," he said. "The way it is set up today, very few people, apart from the record industry, are getting rich on digital music. Generally speaking, the music today isn't generating a boat load of cash for us."
He didn't give specifics, but said the margin on mobile games is much higher.
Phone sales globally are slowing, leading many phone makers to look for new ways to make money. To help cushion the slowdown, and have customers come back for upgrades, many device makers are diversifying into content and services, such as offering music, games, Internet access, and applications.
Apple's latest iPhone offers a full range of such services; Nokia's Ovi portal is the launch pad for its offerings, and BlackBerry maker Research In Motion (RIMM) has carved out a niche with e-mail, and is branching into multimedia.
"This is a good first step for Sony Ericsson, but, honestly, if this is a relaunch of PlayNow, I would have expected a bit more," said CCS Insight analyst Paolo Pescatore. "On the whole, it appears they are being conservative with a wait-and-see attitude toward the market.
Reader Comments (Page 1 of 1)
kyle allen @ Aug 22nd 2008 3:11AM
yay! maby ill start buying music instead of recording it off the radio!
who? @ Aug 22nd 2008 3:23AM
OMG, if you are recording off the radio (not a digital/satellite radio, old fashioned FM), I truly feel sorry for you.
Even if you got the most sophisticated technology in the world to transmit a high-quality FM signal to your radio, it would still be worse quality than a 99 cent song downloaded online. Cheaper is not better in this case my friend.
Camperton @ Aug 22nd 2008 4:11AM
He was kidding.
kyle allen @ Aug 22nd 2008 7:58PM
... no i wasnt
who? @ Aug 22nd 2008 3:17AM
Just out of curiosity, does anyone think that this new 'DMR free' approach to digital media will finally be able to conquer the king, iTunes? I mean, it has kind of been tried before, and iTunes is still doing pretty good.
In my opinion, iTunes too firmly rooted to the industry to be overcome by anybody.
Me @ Aug 22nd 2008 3:39AM
I use itunes to browse music, then I search and buy on Amazon or other DRM free sites. I don't purchase any DRM music. It's a pain to manage, since I switch between devices so often. I don't mind paying 99 cents for a song, but if I can't find a DRM free copy for sale, I'll pirate it instead.
zomg0t @ Aug 22nd 2008 3:46AM
In my opinion it's more about removing pirates' most common excuse for downloading their music from less legitimate sources. It may help get some consumers to switch from iTunes, but I don't think DRM-free music alone will have a significant affect on the dominance of iTunes.
Nano2e @ Aug 22nd 2008 7:54AM
That depends, is Sony Ericsson also going to release an easy to use, attractive, cheap, sexy-hot Mp3 player to pair with the store?
ShadowMaker @ Aug 22nd 2008 3:48AM
Hooray, yet another song store where the Europeans (and the Swedes even more) will pay a 40% premium for the exact same thing, delivered across the World Wide Web.
Jakob Henner @ Aug 22nd 2008 4:07AM
In Scandinavia we pay about 9 Swedish kronor (€0,96), 8 Danish kroner (€1,1) and 8 Norwegian Oil (!) (1€) So actually not a 40% premium, but absolutely just another music store.
ShadowMaker @ Aug 22nd 2008 6:00AM
What I was referring to was the dollar to euro ratio. 1 euro is about 1.45 to 1.55 dollars right now, so music companies make 45 to 50 % more money on a european who buys a song than on a US citizen who buys one.
Fara @ Aug 22nd 2008 4:03AM
Itunes song cost 9 SEK here in sweden, so the pricing is on par.
surur @ Aug 22nd 2008 6:08AM
A Playnow store is intergrated in the SE Xperia X1, so this will be the equivalent of the iTunes wifi store for the Xperia, just DRM free and usable over HSDPA, not just silly wifi
Read here http://wmpoweruser.com/?p=715
Steamer @ Aug 22nd 2008 8:27AM
I would pay to download drm music. I paid to download one song to my computer but now can't load it into an MP3 that I have. Same for the songs that are on my CDs.
eiki @ Aug 22nd 2008 9:08AM
PayNow, CryLater
Hunter @ Aug 22nd 2008 9:16AM
Sounds all well and good until George Costanza, with the help of Kramerica Industries, bankrupts the whole organization.
Andrew @ Aug 22nd 2008 10:14AM
Now that DRM-free is finally taking off, how long until companies start offering lossless drm-free? I still refuse to pay for online music if I'm stuck to either mp3 or m4a/aac formats. If I PAY for a format, I want something I can keep forever and not have to rebuy every single time a new compression algorithm comes out. (Yes, I know you can convert from aac -> mp3, but not without a considerable decrease in quality). Until then, I'll stick to my 'legally' aquired music (where I live) from thepiratebay... In Canada eh? I hate going out and buying CDs, ripping them, and holding onto the disc for . I have a few albums I still have from a ways back and it doesn't feel right.
Kyodai @ Aug 22nd 2008 4:28PM
I'm interested in lossless too. However, I don't feel that DRM-free is as important if it's lossless, because that means you can convert it to mp3 or another lossless format all you want with no loss in quality. For example, you could do the virtual burn->re-rip trick that some DRM removal programs use with no loss of quality, which obviously isn't the case if you were to do it with an itunes track. I found musicgiants.com a few days ago and they seem pretty impressive with lossless tracks, some of which have no DRM. I haven't tried them yet, but I plan on it when i find something I want. I tend to be the type who will only buy digital tracks from compilation albums like soundtracks where there's only one song from a band I'm interested in. Otherwise I just buy the CD and make my own FLAC rip with EAC. I think a lossless store, DRM or not, would be great for those cases.
bradwjensen @ Aug 22nd 2008 2:49PM
I want to be able to pay for FLAC versions with CUE sheets, and electronic artwork. and.. I will probably have to wait forever, because record labels seem to not really give a crap about music or it's quality these days. There's all these MP3s with bad quality, and the loudness wars going on with CDs.. eh.
Omar @ Aug 22nd 2008 5:56PM
Whatever I just go to Spiralfrog.com at least their free.
Hundai @ Aug 23rd 2008 12:50AM
This will never be an iTunes killer, because the install base is not going to compete with the number of iPods out there. Making it DRM-free makes it attractive though. If you really want people to stop stealing music, make it so easy to buy songs and discover new songs that the alternative becomes a hassle. For instance, if my phone knew what I like and kept introducing me to new stuff, and I could buy it right then with one click on my cell phone/music player like Dash Media is doing www.dashmediausa.com, well then you got me sold.
jay @ Sep 29th 2008 3:05AM
You are wrong. Here are the reasons why PlayNow Arena will be an iTunes-killer:
*PlayNow arena features a format playable on all portable devices and Computers. No special applications needed, the files are simply 320kbps mp3-files. No special programs of "Itunes-style" is needed.
*PlayNow will feature an unlimited "all-you-can-eat"-service which allows unlimited access to DRM-free music for a monthly fee, so big consumers does not have to pay 1$ per song.
*PlayNow offers music from all big record labels, DRM-free, which means no restrictions, you get any music you want, you can reuse it how you want, and it's legal.