Our take...
Sony Ericsson's PlayNow Plus is the handset manufacturer's clear response to Nokia's Comes With Music. Both services offer unlimited music downloads throughout the subscription period with the purchase of the handset. Unlike Nokia however, Sony Ericsson has stated that its PlayNow Plus service will only be offered in conjunction with operators, a position the handset manufacturer has typically held with its content offerings. Nokia's initial CWM launch is with Carphone Warehouse on a pre-pay handset and the company is yet to announce any operator deals, reflecting Nokia's tendency to persist in launch in spite of operator resistance. By keeping operators in the loop, Sony Ericsson is playing more safely than Nokia, ensuring that the primary stockist and promoter of its devices, the operator, remains happy. In light of dwindling handset sales and with the majority of its handsets being mid-to-high range, Sony Ericsson also needs to maintain a good relationship with the operators in order to keep the current level of subsidy applied on its products.

PlayNow Plus has adopted a more flexible approach than CWM in terms of business model. CWM is only available on pre-licensed handsets. PlayNow Plus is available on both pre-licensed and unlicensed handsets. Sony Ericsson's pre-licensed service is also more accommodating than the set 12 month period with CWM, with 6, 12 and 18 month contracts on offer. In terms of the handsets themselves, Nokia is launching its CWM prepay on the 18 month old Xpress music 5310 handset. Sony Ericsson's new W902 Walkman handset has much better camera specifications and memory capacity. It remains to be seen whether Nokia will announce a higher end device for the service next week, but as the current offer stands, the Sony Ericsson handset is a more attractive proposition with improved functionalities.

All music downloaded as part of the CWM service can be kept at the end of the subscription period, whereas the Sony Ericsson offer is limited to a set number of tracks, the total of which is determined by customer loyalty and cannot exceed 300. Determining the number of tracks available for permanent download from PlayNow Plus could prove confusing to the consumer. However, music from the CWM service has restricted transfer to one PC and Nokia handsets. Sony Ericsson gives the consumer more freedom, enabling transfer to any PC or MP3 player at the end of contract. With consumers now increasingly aware of the limitations of DRM encrypted music, Screen Digest expects that the opportunity to own the music and transfer to multiple devices will override problems with KYF limitations on PlayNow Plus.

By using an existing subscription service, Sony Ericsson negates the need to renegotiate deals with labels or design a service of its own. Omnifone's MusicStation outnumbered Napster's rental music service subscribers within 7 months of launch. Therefore, the handset manufacturer is maintaining its safe approach, using a proven, successful service rather than developing a service of its own which may not experience the same uptake. Preloading the handset with music is a positive move from Sony Ericsson enabling the user to fully experience the service straight out of the box without the need for search, an often problematic area for mobile music. Promoting good customer experience from the outset will likely encourage further uptake of the service.

Overall, Screen Digest believes that Sony Ericsson has seen and raised Nokia's CWM offer in terms of the initial handset functionality and music ownership whilst maintaining a safe position with the operators; a wise move from the handset manufacturer looking to use music as a promotional tool for its handsets, particularly given the half a million drop in handset unit sales last quarter (i.e. Q2 2008).