Appetite for mobile music growing to $US32b says Gartner

Stuart Corner
Thursday, 25 January 2007 03:58

IT Industry - Market

"Carriers must figure out how to develop the right content partnerships, pricing strategies, content partnerships, licensing deals, distribution channels and marketing. There are also a host of technical challenges to be addressed, such as Digital Rights Management (DRM), storage capacity on the mobile device and network coverage."

Gartner says that today spending varies dramatically from region to region, with the market in Asia Pacific (including Japan) worth more than twice that in North America. In 2005, people in Asia-Pacific and Japan made up more than 41 percent of the worldwide spending on mobile music, and while that proportion will decrease slightly by 2010, the region is still forecast to be the biggest spender.

Western Europe is the second largest region for mobile music, with total spending forecast to top $US9.1 billion by 2010, while North America is forecast to reach $US7.1 billion. In mature markets, growth in ringtone revenue is starting to slow, and will start to slump in North America in 2007 and Western Europe in 2008. "This slowdown does not mean that the market will become unattractive, since download volumes are staying healthy," Gartner says. However, realtones are now the 'cash cow' for mobile music in these markets. They represent 65 percent of ringtone downloads in North America and 70 percent in Western Europe.

Japan and South Korea already account for the majority of full track downloads to mobiles whereas North American users favour PCs and prefer to 'sideload' content to their mobiles.

In some Asian markets Gartner says it is already seeing user-generated content (bands and musicians making their music available via the web for download) helping mobile carriers to avoid digital rights issues.