WIRELESS IS THE FUTURE OF MUSIC — YOU DIG?
WirelessReview.com, Mar 20 2004

After a long and successful run in artist management, Diggit Entertainment Group CEO Bill Diggins is now steering the company into wireless, establishing mobile content partnerships with the Grammy Awards as well as music magazines Vibe and Spin. He spoke with Jason Ankeny about his entrance into the wireless space and the marriage of music and mobile technologies.

On the intersection of music and wireless: I spent 15 years doing music management. When you’re the manager, you’re involved in every aspect from recording to all the way to distribution on a global level and negotiating every deal in between. So you really need to understand the music industry, and we as managers have a great opportunity to control all of the value chain. I managed TLC—the biggest-selling female group of all time—Billy Idol, Steve Winwood, Bjork, Johnny Rotten and Erasure; total sales of our groups were gross of about 60 million records, for gross revenues of around $600 million. I decided I would diversify into wireless because I saw the opportunity to become a company that could be a single point of contact for artists and for brands, and because of my experience in the music industry, I understood localization of products and building out products and licensing throughout the world. That differentiates us from anybody else in the wireless space—we understand what the music industry needs and how to deliver it through the medium available through wireless. We know that the next big thing in wireless and in music is the wireless distribution of products—as broadband increases, so will the need and the opportunities to deliver full downloaded songs.

On Diggit Entertainment: What we did with the Grammys is connect to the audience and allow them to be interactive with the show. We allowed users to register for text message alerts and did a mobile game campaign called “Grammy Music Challenge”—we would give you a snippet of a song and you would have to name which Grammy-nominated artist it was. If you got eight out of ten right, you won a free ringtone. Vibe and Spin are also partners—we told them what we wanted to do is make mobile magazines that would give you a preview of what’s in the magazine, along with a number of other features like proprietary photos and news, ringtones and trivia contests. We saw a great opportunity to come into this space and to become the glue between the hip-hop community and the carriers, and put together a full solution for them. We look at ourselves as branded integrators, as opposed to just taking a product into the marketplace.

On the music industry’s learning curve: There’s a huge education process taking place right now, and we’re trying to educate people in the difference between wireless and online. You have walled gardens where it’s next to impossible to go peer-to-peer without [wireless carriers] allowing you to do that. You also have a system that consumers are used to paying for, and we believe that network operators aren’t going to allow this to become a system like the Internet, where you can just look anything up and anyone can go onto the Web site and download it for free. The other difference is that it’s not as simple as building an HTML site and just putting it up—you have more control. We have to go through testing with all the operators for any of our applications. I think artists are starting to come around—more than anything, they’re concerned about ringtones, because ringtones are the one aspect of this value chain that in the future could go peer-to-peer. In the next two to three years, we’re going to have mass production of phones that have built-in MP3 players, and you’ll have Bluetooth, which will allow the transfer of an MP3 document from the computer to the phone and from one phone to another.

On what’s next: The endplay is without a doubt a converged unit—a smart device that has all the best functionalities of an iPod and a telephone. You’re seeing in Asia right now opportunities to fully stream your songs and your videos in MP3 quality, and the broadband for the rich media is already there. The key in America is being able to have distribution of your products across different formats and carriers. Those challenges are going to be met by third-party bridges that will allow the consumer to seamlessly interact with any one of the carriers or any one of the phones.

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