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NTT DoCoMo buys music retail chain

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Japanese mobile phone network NTT DoCoMo is to buy a majority stake in Tower Records Japan.

The telco said it will pay ¥12.8bn ($108.84m) for a 42 per cent stake in the privately held retailer which was founded by the US record store chain in August 1979 but since October 2002 has been an entirely independent entity.

DoCoMo will initially provide Tower's 100 Japanese stores with pay-by-phone systems allowing consumers to purchase music and have it billed to their FeliCa mobile phone accounts.

Both firms also said they are considering a digital music download service partnership, and that's likely to be the real motivation behind the deal. DoCoMo gains a music brand and knowledge needed to provide such a service which could integrate perfectly with the telco's i-mode facility. Some reports claim music accounts for around half of all i-mode content sales.

Indeed, Tower Records Japan is already working on a digital download service, in partnership with Napster.

Phones are going to be a key music playback platform, and the Tower deal puts DoCoMo in a strong position to capitalise upon the trend. ®

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