SoundTempest

Omnifone, a UK-based company that provides applications to mobile phone manufacturers, recently announced a new point-of-connection music service called MusicStation Max as well as a partnership with LG Electronics, who will be rolling out the service in new phones in several months.

Described by Omnifone as the “world’s first pre-licensed unlimited mobile music phones”, any device integrating MusicStation Max (such as the upcoming LG MusicStation Max 3G handset) will allow customers to download and share unlimited amounts of music as part of a combined music, data, and voice plan. Playlists and downloaded music are backed up on a server so that users of MusicStation can “migrate their consumer experience” in the event of a lost phone or expired contract.

Though some news outlets have reported that MusicStation is free, this is not entirely true. While users of the service may download unlimited amounts of music, the telecom operators (such as LG, Vodafone, and others) offering the service as part of a combined plan may charge customers to access it.

Omnifone has stated that more than 1.6 million songs will be available thanks to a licensing agreement with Universal Music Group. Previous Omnifone music services have involved contracts with all four major record labels.

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Well, I can’t really say “I called it,” technically. But hey - this did come no more than two weeks after I posted my observations on the industry trend towards large-scale, point-of-connection models.

When reading the other media coverage of this story, I really found it frustrating that the word free was consistently used to describe MusicStation Max. Maybe I’m crazy, but as I wrote in my report, if it’s being bundled with other services and the rate for said services is increased, then it really isn’t free. Comcast cable presents things the same way, and it irks me just as much. They state that you can get “free” On Demand movies with your cable service. Sounds great, but their advertising and website neglect to mention that it won’t work unless you have a digital cable box, which of course costs another $8 or so per month (and you don’t need the box to actually receive standard cable service.)

Semantics aside, this is a pretty neat development. I was impressed by the remote backup feature and the fact that user playlists and music are transferable between providers that use MusicStation; cell phone companies aren’t exactly known for being nice to people switching or stopping their service, so not having to worry about your music collection being lost at the end of a contract is great.

Still, I am disappointed that no information is available on the financial arrangements Omnifone made with their music licensors, like Universal. Will royalties be paid on the basis of monitored song downloads? Of each phone sold with MusicStation enabled? Of each phone activated? How are artists going to get their share of the money (assuming they get one at all?) Hopefully, we’ll hear more details as time goes on.

NOTE: For those of you wondering why this story really matters, you may be surprised to know that the mobile sector of the music industry is inexplicably profitable, generating billions of dollars per year in revenue. It’s the only market where you can sell people cut down, poor quality songs for $3 a piece. It’s not even as if you can’t make your own ringtones easily for free, either! Imagine how happy Steve Jobs would be if he could triple or quadruple the prices on iTunes while re-encoding everything to 64kbps and only selling you 30 seconds of each song, which in turn can only be played on a single computer and can’t be transferred to a new computer (which you would probably need in about 6-12 months).

It’s a crazy business…