On-demand music service Muve Music and Brazilian mobile carrier TIM announced their partnership Monday that marks Muve Music's first foray outside of the United States. As Billboard previously reported, TIMmusic was quietly launched last month. What's now apparent is the pricing of the Muve Music-powered service is different than the original but still a step forward for digital music.
Created by Cricket Wireless and launched in early 2011, Muve Music provided Cricket with a value-added music service to offer users of its prepaid mobile service. Cricket bundled Muve Music with its unlimited talk, text and web plans at no extra cost. The recipe has proven to be popular with Cricket customers. Muve Music surpassed 1.4 million subscribers in February.
But TIM has not copied the way Cricket Wireless integrates the music service into its mobile plans. Users of the Infinity prepaid and Liberty postpaid plans are charged when the customer either downloads music or listens to music that has been downloaded and stored on the phone. In other words, a small fee reduces a prepaid customer’s balance for every day TIMmusic is used. Postpaid customers are charged for every month in which the service is used whether over the mobile network or a WiFI connection.
Muve Music's breakthrough was its ability to reduce the friction involved in signing up for an on-demand music service. Although TIMmusic doesn't reduce friction as much as Muve Music, it shows that today's music services are improvements. TIMmusic allows for a smooth transaction and eliminates the need for a credit card by allowing the customer to pay through the mobile carrier.
One particularly important innovation is the cost of daily usage by prepaid users. TIMmusic is a departure from the costs of most subscription music services around the world. Infinity prepaid users pay R$0.50 (US$0.25) for each day the service is used. Liberty postpaid users pay R$9.90 (US$4.98) per month, less than the R$14.90 ($US7.50) charged by both Rdio and Deezer for mobile and web access in the country. The TIMmusic catalog has over 4 million tracks and more will be added shortly, a Muve Music spokesperson told Billboard.
Localized pricing is key. Some countries have a combination of high prepaid usage and low costs. TIMmusic would not be practical if labels demanded a fixed monthly fee similar to what is paid for Spotify or Deezer in the United States or Europe. By licensing their catalogs to a low-cost, prepaid service, record labels are showing the kind of flexibility that is needed to develop new business models in developing markets. The average cost of smartphone service in Brazil is about $25 per month, according to Nielsen. That cost can run much less in countries such as China ($16) and India ($9.25) that offer huge potential markets but less revenue per user than in smaller, Western markets.