Voda MusicStation
Vodafone announced their MusicStation product this morning and better people than me have already written about it.
My immediate thoughts run to what would be a considered a success to the Vodafone UK Monster. In Q2 (Apr-Jun) Vodafone had a turnover of £1,209m and a customer base of 17.6m. Even if Voda managed to sign up 1m customers or 5.6% of the base with a 50:50 split between mobile & PC connections (ie £2.12/week net revenue), the quarterly turnover only runs to £9m/quarter or 0.7% of turnover.
Bear in mind that the revenue is also going to be split three ways between the content provider (Record Company), platform (Omnifone) and distributor + billing company (Vodafone), we can see that the offer is also going to be pretty insignificant on the profit front. Especially when you consider Voda UK made £511m in operating profits for the whole of the 06/07 year. Also, the service attracts zero carriage costs and doesn’t require a data service subscription.
However, I believe the service is far more important, especially in the short term, than numbers would otherwise indicate:
Even though, I'm don't count as a Youth anymore, I'm going to give it a go when it is finally released.
My immediate thoughts run to what would be a considered a success to the Vodafone UK Monster. In Q2 (Apr-Jun) Vodafone had a turnover of £1,209m and a customer base of 17.6m. Even if Voda managed to sign up 1m customers or 5.6% of the base with a 50:50 split between mobile & PC connections (ie £2.12/week net revenue), the quarterly turnover only runs to £9m/quarter or 0.7% of turnover.
Bear in mind that the revenue is also going to be split three ways between the content provider (Record Company), platform (Omnifone) and distributor + billing company (Vodafone), we can see that the offer is also going to be pretty insignificant on the profit front. Especially when you consider Voda UK made £511m in operating profits for the whole of the 06/07 year. Also, the service attracts zero carriage costs and doesn’t require a data service subscription.
However, I believe the service is far more important, especially in the short term, than numbers would otherwise indicate:
- Music is seen as the current pathway to youth subscriptions and Voda UK currently has the lowest market share of the main four operators in the youth segment and the other operator is by far and away the strongest operator in the music space. Currently, the Omnifone platform is an exclusive to Voda in the UK.
- Music files are several meg in size: quality of network, coverage and download speed will start becoming a factor again and becoming a differentiator for people other data card users. Again, this gives a network a capability of differentiating and most importantly
- Voda has to prove to the world that their platform can be used for distributing content with Voda having a bigger role than a mere bit shifter. Funnily enough, I think that the payforit service is a more important building block than a music service.
Even though, I'm don't count as a Youth anymore, I'm going to give it a go when it is finally released.
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