TDC’s PLAY Delivers Free, Unlimited Music – A New Era for the Subsidized Rental Model

| Apr 1, 2008 | Wireless Services - Europe | Show Update

| Analyst: Emma Mohr-McClune

Current Perspective: Positive
Vendor Importance: High
Market Impact: High

Event Summary

March 31, 2008 – TDC launched PLAY, a ‘free unlimited music’ service for both its mobile postpaid and YouSee broadband and cable subscriber bases. PLAY features over one million tracks from three of the four largest international music companies, EMI, Sony BMG and Warner Music Denmark, as well as a large selection of Danish independent labels for both new and catalogue releases. The ability to play the downloaded tracks will expire automatically when the customer terminates his or her subscription. PLAY is applicable to all TDC’s mobile music-enabled handset portfolio, and to subscribers of the following postpaid packages: TDC Duet Extra, TDC Simply, MobilExtra, Mixit Regning, MaxSMS, MaxSMS Live, MaxTale, MaxTale+, MaxOne (gl), MaxOne (ny), MaxOne+, MobilTid Online, Only99, Only199, Click and Meda.

Analytical Summary

• Current Perspective: Positive on TDC’s new PLAY service, which promises to provide the operator with a unique, high-profile and wholly innovative differentiation in the consumer mobile media market. PLAY neatly anticipates a new breed of fully-subsidized and ‘free’ music services this year, from Nokia, Apple, Omnifone and other service providers adopting the same model.

• Vendor Importance: High to TDC, as PLAY provides multiple opportunities for loyalty-generation and cross-selling, particularly as the operator starts to build service links and introduce cross-selling incentives between its distinct mobile and broadband customer bases. From a marketing perspective, PLAY is a dream.

• Market Impact: High on the Danish mobile media market, and high on the wider European market. PLAY is currently unchallenged in Denmark, and its ‘free, unlimited tracks’ proposition will benefit from its first-to-market approach. PLAY also promises to be the blueprint for a new breed of ‘free mobile music’ services, in which the service provider subsidizes content costs to lengthen customer lifecycles and create additional stickiness to its core subscription services.

Recommended End User / Customer Actions

• TDC mobile subscribers to one of the applicable post-paid packages are certainly advised to test out PLAY. However, their existing handset must be mobile music enabled. Subscribers should expect TDC to start promoting heavily-subsidized mobile music enabled handsets in the coming weeks.

• TDC mobile subscribers should be aware that TDC is planning to introduce a ‘side-loading’ element to PLAY this year (although the precise time-line is unclear). Customers should be aware that this functionality omission is due to be rectified.

• All Danish mobile customers should anticipate a heavy round of competitive response to PLAY this year. For starters, Nokia is due to launch its ‘Nokia Comes With Music’ initiative in the coming months, which will feature a ‘free, unlimited mobile music download service’, bundled together with the price of a new Nokia device. Although device subsidization levels are still unknown, Nokia is expected to price aggressively.

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Current Perspective

Competitive Positives and Concerns

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