Filed by KOSU News in Business.
August 6, 2011

Americans spend more money on music at Apple’s iTunes store than any other music retailer, yet some people are being left out of the party.

For the large group of consumers without a home computer, an iTunes account is out of reach. Those are the people wireless provider Cricket Communications is targeting with Muve Music, a phone-only music service.

At a Cricket store in Washington, D.C., customers use their cell phones to get email and stay connected to family and friends. But they aren’t willing to pay the high prices of many of the common carriers, and that’s why they’ve come to Cricket.

“It’s cheap,” says Cinthia Wilson, a medical assistant in the district and a mother of four. She says her sister, who used to be on Sprint, just moved over to Cricket.

“She got tired of paying all that money for the same thing she can get here for $55,” she says. “She was paying a hundred and something — that’s ridiculous.”

Now, for an extra $10, Cricket customers can get an unlimited music plan, too. That deal appealed to Carlos Dugger.

“I love my gospel and my jazz,” Dugger says. He says his phone, not his computer, is his main connection to the Internet.

‘All About The Phone’

Cricket is aiming for people like Dugger.

“Cricket’s customers live on their phone. Their phone, not the computer, is the center of their life,” says Jeff Toig, who developed the company’s music service. Toig says most of Cricket’s customers make $50,000 a year or less. The iPhone, he says, probably isn’t even an option for them.

Toig admits they could choose other music subscription services that cost $10 a month like Napster, Rhapsody and Spotify. But, he says, those services all require customers to download an app to their phone first.

“The app is less functional,” he says. “The experience doesn’t start on the phone, it starts on the computer, and the phone is an extension. We have taken a fundamentally different approach, because our experience is all about the phone.”

A Market That’s Been There All Along

Cricket’s music service is built in and gives its customers access to millions of songs, ranging from the work of great gospel singers to independent artists and hits from major labels.

In some ways, it’s surprising that the big record labels agreed to go along with Cricket’s service. They’ve been notoriously skeptical of online music plans. Michael Nash, a vice president for digital strategies at Warner Music, says the typical Cricket customer burns CDs from friends and listens to radio.

“You’ve got a situation where you don’t have [a] great legitimate music proposition, and you don’t have a very convenient proposition,” Nash says.

Nash says by creating a music service for the phone, Cricket has tapped into many customers who might not have paid anything for digital music.

Skeptics wonder, however, just how much this service really adds to what’s already out there. Morningstar analyst Imari Love says pretty much all phones now have Internet access, and that’s really all you need in order to have a phone with music. Love thinks there is a limited market for low-cost, phone-only music services.

“I’m really actually struggling with what real value the Muve product is going to add,” Love says.

Since Cricket added the Muve Music service a little over five months ago, however, it has garnered more than 100,000 users — 50 percent of whom are completely new to Cricket’s phone service. It might be that in a time when the economy and Americans are struggling, a low-cost music service may just hit the spot. [Copyright 2011 National Public Radio]