In conjunction with its launch of the LG Chocolate phone today, Verizon Wireless has announced that it’s eliminating its $15 per month fee for subscribing to its V CAST wireless music download service.
Cellular operators have been very fired up about mobile media, especially over-the-air music download services, as ways to create and amplify revenue streams from their wireless customers. Operators like Verizon and Sprint have opted to open their own wireless stores and services to keep the revenue close to home.
The $15 fee for Verizon V CAST was a great example of how that revenue amplification could work. Verizon offers V CAST subscribers the opportunity to purchase music wirelessly, selecting tracks from a library of more than 1.3 million songs from both major and independent labels. Songs cost $1.99 apiece, and users received a version for their Windows PC in addition to a version for their V CAST enabled phone.
Doing the math, that’s $15 per month, plus $1.99 per song, plus airtime charges for each purchase (and the data transfer involved in searching, selecting, and purchasing). All going to Verizon. What a deal!
By eliminating the $15 per month charge—in conjunction with the music-friendly LG Chocolate phone—Verizon is aiming to make V CAST music attractive to more users. Now, anyone with a V CAST-capable phone can purchase tracks for $1.99 apiece (plus airtime), purchase songs for a Windows XP PC for $0.99, and transfer WMA (and, for the Chocolate, MP3) from their personal collections to their phones for free.
The big question is: is elimiating the monthly fee a sign of the viability of the over-the-air music store model, or a sign that V CAST is hurting for customers? Is the capability to purchase music over-the-air from a mobile phone so compelling that music fans are willing to do so on more than a once-in-a-blue-moon basis? Eliminating the $15/month fee may make it less painful for Verizon customers to sample the service, but how many will be so blown away that they’ll keep coming back, given that the same content is available more economically from elsewhere, and can be easily transferred to the same phone?
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