"Mobile radio," in one form or another, has been around for ages -- most of us are familiar with boom boxes, not to mention old-school transistor radios. Now, more and more companies are coming around to the idea that people may very well want radio on their tiny -- and ubiquitous -- mobile phones. In keeping with that idea, Sprint Nextel (NYSE:S) has announced a deal with RealNetworks (NASDAQ:RNWK) to provide streaming radio on its cell phones.
The timing couldn't be more appropriate, if nothing else. After all, the release of the Rokr phone from Motorola (NYSE:MOT) is fresh in most of our minds. That's the phone that incorporates Apple's (NASDAQ:AAPL) iTunes service and will be distributed by Cingular, a joint venture between BellSouth (NYSE:BLS) and SBC Communications (NYSE:SBC).
Through the deal between Sprint and RealNetworks, users will be able to listen to streaming radio (including podcasts) on their cell phones for $6.95 per month. In addition, they will be able to watch music videos on their phones.
The move makes sense for both parties. Sprint Nextel likely wanted a good alternative to the Rokr phone that everybody's talking about, showing that it's hard at work providing a "cutting-edge" musical product to its users. Meanwhile, RealNetworks faces competition not only from Apple's iTunes but also from companies such as Napster (NASDAQ:NAPS) and Yahoo!.
I still think the jury is out on music services via cell phones, though. Given the popularity of the iPod, it seems the lion's share of people rely on that device or other MP3 players for their mobile musical needs. Many people have already pointed out that the Rokr's weaknesses include the idea that it doesn't have memory space for that many songs.
Maybe cell phones tricked out with a few streaming radio stations provide a nice feature for users, but whether they're willing to pay a monthly subscription fee remains to be seen. It seems that monthly subscription fees for radio remain squarely in the realm of satellite radio providers such as XM Satellite Radio and Sirius.
I, for one, am greatly curious as to how quickly consumers will take to many of the multimedia applications increasingly available on cell phones -- and what exactly they will be willing to pay extra for, given the many alternatives available in portable media.
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Alyce Lomax does not own shares of any of the companies mentioned.
