FOCUS: Mobile Phone Cos Tune Into Live Music Sponsorship

LONDON -(Dow Jones)- Mobile phone companies are shifting megabuck U.K. sponsorship campaigns away from sports events and into live music, hoping to take advantage of a boom in concert attendance and also fuel demand for the high-margin music-based mobile content.

Sport has traditionally taken the lion's share of telecoms sponsorship cash, but the emergence of music as a key driver for data usage amongst mobile phone users has renewed interest in concert promotion. Live music also offers mobile companies the opportunity to provide special services for customers of the sponsor, helping to reduce the number of customers switching providers, or churn, and also attracting new users.

"There is no doubt that music is now critical to mobile sponsorship," James Kydd, brand director of Virgin Mobile U.K. (VMOB.LN), told Dow Jones Newswires.

The swing in focus away from sports promotion to live music has coincided with a boom in attendance of live music events. Live concerts have always been popular in the U.K. summer, but the number of events has exploded in recent years.

In the year to September 2004, over 1.7 million concerts were held in England and Wales, according to a MORI poll conducted on behalf of the Live Music Forum, a U.K. organization involving the music industry, the government, venue owners and local authorities. The Live Music Forum estimates the U.K. live music industry to be worth GBP487 million a year - despite a decline in sales of recorded music - a 50% increase since 1997.

As a sign of the times, Deutsche Telekom AG's (DT) T-Mobile International (TMO.YY) mobile unit signed an exclusive deal with singer Robbie Williams in July, allowing its customers to download the singer's content - including exclusive live songs and concert footage - onto their phone.

T-Mobile also still sponsors the West Bromwich Albion top-flight English soccer team in the U.K.

O2 PLC's (OOM.LN) sponsorship of the Arsenal soccer team comes to an end this year, a deal which costs GBP3 million a year. It also sponsors the English Rugby team. The company is instead moving into music sponsorship in a big way. It sponsors the Wireless Festival in London and has made an ambitious bid to turn the Dome in London into a live entertainment complex called 'The O2'.

Paul Samuels, head of sponsorship at O2 said music offers better value in sponsorship terms than soccer, which is a "very crowded market."

"There's more bang for your buck in the music arena. Because there is more opportunity to offer relevant products and services, there is more opportunity to drive revenue," he said.

O2 will spend around GBP2 million on music sponsorship in 2005, a spokesman said.

Targets Key Youth Audience

Elsewhere, Virgin Mobile sponsors the V Festival, which has been running for ten years, while France Telecom SA's (FTE) Orange sponsored the Glastonbury Festival for the fifth time and the T-In-The-Park Festival. Other mobile companies, including handset makers Nokia Corp. (NOK), a sponsor of the Live8 charity concerts, and Sony Ericsson, have also sponsored a host of live music events across Europe this summer. The mobile sponsorship dollar has followed bands like Coldplay and Oasis like groupies around the festival circuit.

O2's Samuels said sponsoring live music events enables it to target the key 16-34 year old audience but more generally, music offers sponsors access to a much broader spectrum of people than sports sponsorship.

"There are only a limited number of our customers that are Arsenal fans. Music is definitely key for sponsors as it offers access to a broader spectrum of people - from opera lovers to rock fans," Samuels said, adding: "There's more opportunity to differentiate your brand in music. Football sponsorship isn't as fresh anymore."

Virgin Mobile's Kydd explained that music is key to driving data usage amongst mobile phone users as it provides them with an obvious way to personalize their phone through ringtones, real-tones and other music content.

"Music is the most personal thing you can play with on a phone. It also ties in with a consumer's desires. The impulse to buy the latest phone is the same as buying the latest music," Kydd said.

Music is driving sales of high-end phones like Sony Ericsson's Walkman phone and Nokia's new N90 music phone, but camera and video phones have also changed the live music experience. While concert goers of yesteryear hid dictaphones in their jackets to record live music, fans today use their phones to store or send pixelated snippets of live music from the event.

Music Sponsorship Requires Fresh Approach

But the sponsors are aware that many live music fans are also cynical about big corporate sponsorship deals. "It's no longer just about emblazoning your logo on a shirt to promote brand awareness. Music users are very cynical about sponsorship, which has to add genuine value to an event," Kydd said. He said message screens which display text messages to the crowd are an example of an innovative way to link Virgin's sponsorship to the event.

The sentiment was echoed by Julian Diment, head of commercial & brand partnerships at Orange, which has to tread carefully when sponsoring the very popular and long-running counter-culture festival in Glastonbury.

"You have to be smart. You can't just turn up and exploit the relationship between the fan and the band. The more-savvy music customer will accept corporate involvement as long as they benefit from it," he said.

Diment said that Orange operates a tent where customers can recharge their phones and also holds backstage concerts and streams highlights of the festival via its mobile television service. Although the tent used Orange's colors, it wasn't branded. Orange also offered its customers the chance to buy tickets through the Orange portal after the festival had sold out.

O2's Samuels said that sponsoring events like the Wireless Festival - a summer music festival held in London's Hyde Park - enables it to offer users a unique experience which can help retain, or attract, customers. He said that O2 users could buy tickets before they went on general sale, get fast-track entry to the event, avoiding long queues, and also access an O2 stage, with massage tents and quieter bars than in the main festival.

Orange's Diment said that as mobile companies have worked more closely with music companies, competition amongst record labels to promote new and established artists to mobile phone customers has increased. Diment said the company's sponsorship of music will increase and the company is currently striking deals with live booking agents to offer its customers first refusal of concert tickets.

Yet not all were so bullish on the power of music in sponsorship. Vodafone Group PLC's (VOD) David Wheldon, global director of brand and customer experience, said its sponsorship of Ferrari's Formula One racing cars, English soccer team Manchester United, and the Spanish soccer league, provide the company with global brand awareness, which is difficult to achieve with music.

Wheldon said global sporting events provide a "gigantic global platform" for creating value, whereas music is more effective at the local level. He said Vodafone sponsors festivals in Holland and Portugal where it wants to promote its brand, but overall, looks for marketing opportunities which translate across borders.

Company Web site: http://www.virginmobile.com; http://www.orange.com; http://www.o2.com; http://www.t-mobile.co.uk; http://www.vodafone.com

-By Nic Fildes, Dow Jones Newswires; 44-20-7842-9264; nicolas.fildes@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 24th August 2005