Mobile Music to Surpass Online Music Services by 2010
Fri Jun 16, 2006 12:35 pm
Wireless over-the-air (OTA) music services in the U.S. could have more than 50 million users and generate more than a billion dollars in revenue by 2010, according to research firm IDC.
Although adoption remains low today, IDC forecasts OTA will be driven by the convenience of buying music online and the music industry's opportunity to reach consumers through new distribution channels.
"OTA mobile music storefronts are emerging as one of the most important new channels for fans to discover, purchase, and enjoy full-track music and related content. Key drivers for future growth include music-enabled handset penetration, deployment of broadband wireless networks, increased marketing efforts, bundling and cross-promotion of various music-related services, and driving flat-rate pricing schemes," says Lewis Ward, research manager, Wireless and Mobile Communications: Entertainment.
According to the survey, a total of 22 percent of respondents indicated that they would buy at least one track from their service provider within the first three months of availability, assuming they had an appropriate handset. Eight percent of respondents age 25-44 indicated they would buy four or more tracks. It's this 25-44 age group that analysts believe could be the core base of wireless over-the-air service users, in particular those who may be new to digital music services.
"IDC expects that OTA tracks at about $2.00 each will emerge as a sustainable price point as long as mobile storefronts are well-designed and offer a wide selection of music, and the music listening experience on the device is comparable to MP3 players," says Ward.
In order for wireless music services to reach critical mass, a variety of music-enabled devices need to first find their way into the hands of wireless subscribers. This has not happened so far due in part to limited offerings from the handset vendors. However, the shift towards a greater variety of music-enabled mobile phones at various price points is already in motion. IDC expects music-enabled mobile phone shipments to reach nearly 60% of all handsets shipped in the U.S. by 2010.
