The unlimited future of mobile musicTim Hadley, PR Director, Omnifone

• Founded: 2003• CEO: Rob Lewis• Staff: 75• Funding: Private• Services: MusicStation, MusicStation Max• Live rollouts: Europe, Asia Pacific, Africa• Headquarters: Island Studios, London, UK• Satellite offices: Scotland, Sweden, Hong Kong, South Africa

Omnifone Milestones 2007: Q1 2007: • Omnifone announces

MusicStationQ2 2007: • International licensing

signed with all majors• European launch: Telenor

Sweden• Red Herring EMEA 100• Music Service Award Meffy

Q3/4 2007:• Asia Pacific launch:

3HK• UK launch: Vodafone• South Africa launch:

Vodacom• Red Herring Global 100

Omnifone Milestones 2008: Q1 2008: • Omnifone announces

MusicStation Max• Best Mobile Music Service:

Global Mobile Awards• Gold Award Mobile Music:

Future Mobile Awards• Gold Award Most Effective

Use of Music: MAMAs• Entrepreneur of the Year: UK

Technology, Innovation & Growth Awards

Q2> 2008:• Multiple MusicStation

rollouts• MusicStation available

on 100m mobile users• MusicStation Desktop

Edition launches• MusicStation Max

launches

Music Revenues:Digital not compensating for 8yr physical decline:• Global physical sales down 6% to $16.4bn in 2007• Global digital sales $2.9bn in 2007 (IFPI)Digital pay per track downloads slow to take off:• 20 iTunes tracks for every iPod sold (Apple)Mobile pay per track:• 6 mobile tracks per user per year (Groove Mobile)Predicted Mobile Music Revenue: by 2012 (Juniper)• Subscription based rental services $3.3bn• Original recordings delivered to mobile $2.8bn

Market Opportunity:• iPhone launch driving interest• >1 billion new handsets per year• JAVA >75% of handsets in Europe and Asia Pacific• Mobile network now larger than internet• Multi-billion $ investment in 3G/HSDPA network infrastructure

Mobile music services: • High-end 3G contract mobiles only• Slow WAP based user experience• Non competitive pricing• Uncertainty over data charges

Competitive threats to operator lead music services:• Online P2P, Bluetooth, communities• Sideloading• iPhone• Nokia ‘Comes With Music’

Next generation mobile music experience:• Anytime, anywhere access on virtually any device• Build connected music experience through

community• Facilitate music discovery and recommendations• Utilise integrated billing, direct to subscriberMass market mobile music: unlimited

downloads:• Cultural and generational shift away from ownership• Provides legal framework for unlimited discovery,

downloading and sharing• Better revenue proposition for operators and music

industry: doubles music revenues, long term repeatable revenues

MusicStation:• Unlimited music downloads, wherever

you are, whenever you want, on virtually any music phone

• News, recommendations and community features: search, discover, play and share music

• Pre-installed or OTA• 1.7 million tracks • Priced to suit market: (weekly/price plan)• No data costs• No credit card needed• No computer or internet needed• Never lose your music again

MusicStation Results:• One new subscriber every minute• >75% of those trying for free stay with the service. Low churn• Arun Sarin; 500,000 track downloads in first 10 days• Annualised revenues from MusicStation exceeded one operator’s

pay per track service in just 9 weeks

MusicStation Max:• First pre-licensed unlimited music

phones produced in cooperation with major manufacturers

• Free unlimited music ‘out of the box’

• MusicStation Max price plans: drives data revenues

• Hero handset: full utilisation of handset capabilities

• Keep favourite music at end of contract

• Fully interoperable with MusicStation

Thank you

Analyst Community Reaction: MusicStation • Juniper Research: Windsor Holden• “We believe that services such as the Vodafone MusicStation, where

consumers rent unlimited mobile music for the period of the subscription, represent a tremendous opportunity for operators.”

• Yankee Group: Declan Lonegran• “The mobile version of rented music is about to explode, and the

implications for the mobile and music industries will be enormous… MusicStation will be a success story.”

Analyst Community Reaction: MusicStation• Current Analysis: Emma Mohr-McClune• “MusicStation is not only the strongest competitive response to the

iPhone we’ve seen to date, but it neatly offsets ‘Nokia Comes With Music’ competition some six months before its expected release.”

• IDC: Jill Finger Gibson• “Omnifone's MusicStation could become the game-changer that

propels mobile music services into the mainstream and makes it harder for the iPhone to gain traction outside of the US.”

Analyst Community Reaction: MusicStation Max• Jupiter Research: Mark Mulligan• “Considered together, MusicStation Max and Nokia Comes With

Music have long-term potential to drive mainstream adoption beyond paid digital music’s current niche.”

• CCS Insight: Paolo Pescatore• “MusicStation Max could prove attractive to operators who should

benefit from increased usage on their data networks and significant ARPU uplift compared to existing full track downloads.”