Cellular Music Services Doomed By High Prices

High prices charged by cellular operators make the success of over-the-air music download services unlikely, according to a study released Thursday by market research firm Strategy Analytics.

The study examined end user reactions to the Sprint Mobile Music Store and the competing Verizon Wireless V CAST Music service, both of which offer over-the-air downloads of full tracks of music directly to cell phones. Of the two, users had a strong preference for Sprint's offerings, particularly in terms of ease-of-use and the perception of network performance, according to the market research firm.

Specifically, Sprint's service received 21 percent higher marks from consumers in a survey than Verizon Wireless' offering, Strategy Analytics said. However, respondents were also clear that both services are overpriced.

"Strategy Analytics has identified significant levels of consumer interest in mobile music services, and the current services -- especially Sprint Music Store -- meet or exceed user expectations in terms of performance and convenience," Paul Brown, a Strategy Analytics wireless analyst, said in a statement. "However, price remains a considerable barrier to acceptance."

Sprint charges $2.50 per song for over-the-air downloads, which is two-and-a-half times more than the cost of purchasing a song from Apple's iTunes online music store and downloading it to a desktop computer. Verizon Wireless' price for over-the-air downloads is slightly less and it offers even less-expensive prices when music is downloaded via a PC.

Both pricing schemes are far higher than end users are willing to pay, the study concluded.

"Our research suggests that users are willing to pay a premium of around 35 percent for the convenience of downloading tracks to both their wireless devices and PCs -- subject to reliable network performance," Kevin Nolan, head of the research firm's Advanced Wireless Laboratory, said in a statement. "In our view, the current 100 to 150 percent premiums charged by the main operators make adoption of these services highly unlikely."