Vodaphone have taken a bold leap into the music industry releasing a new offer that allows mobile customers to stream live music to their phone for only $2.75 per week. The product directly competes with iTunes and although a live stream and not a download, it works on the same principle. So what is their strategy? What is the key driver of this move?
A month after Sanity released its load-it service, Vodafone has entered the fray with MusicStation, a subscription music service for mobile phones which claims to offer more than a million tracks. (Hats of to Life Hacker for this). With 89% of youths between the age of 13 and 19 owning a mobile phone, it is no wonder the cellular providers are falling over themselves to get a piece of the action.
The strategy is simple, offering consumers a product alternative. Streaming lowers the consumer buying decision process, keeps up to date with trends and tastes and directly targets the 'golf fish' like attention spans of Gen Y. For a remarkably low $2.75, which music savvy youth wouldn't jump onto the proverbial band wagon?
Josh Strawczynski's Opinion
First mover advantage is going to be important in the cellular market. The issue is not getting people to adopt the new technology, the key is leveraging it to attract more customers to Vodaphone (locking them into contracts). Increased competition has led to even more cut throat retention tactics, the barriers to exit are high, so offering exceptional products and service value is essential.
Sam Berringer's Opinion
A bargain, defiantly a bargain. Even if I wasn't all that into music, I can see the value in this one. I love it as a product extension and who knows, if trends follow that of the USA, digital streaming could be a cash cow in the long run.
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