Video to Drive Premium Mobile Content Market to Double by 2011

Driven by rising demand for video, the market for premium mobile content is expected to exceed $44 billion in 2011, more than double the nearly $20 billion in 2007, iSuppli is predicting. The mobile video market continues to develop, but remains highly fragmented with uncertain business models, technology standards, and consumer usage models. Content rights need to be resolved. Geographic differences are significant both in terms of content consumption and the regulatory environment.

The mobile video market will develop incrementally, but offers the biggest potential upside. iSuppli projects the combined streaming and broadcast mobile video markets will exceed $6 billion in 2008, up from $1 billion this year.

Different regions, different trends

The mobile data market overall is continuing to expand robustly, driven by strong mobile content growth and a sustained rise in mobile messaging. However, significant differences in growth rates are emerging. iSuppli's research has identified the following regional and country-level trends:

• In Asia, India leads Compound Annual Growth Rate (CAGR) growth of non-messaging data revenue at 40.4 percent.
• Italy will see the strongest non-messaging data revenue CAGR through 2011 among major Western European countries, at 29 percent. Ringtones represent the strongest segment today, but video will dominate Italy's mobile content revenue by 2011, followed by games.
• In the Americas, Brazil will see a 41 percent CAGR for non-messaging data revenue.

"Data and content revenues are the life preservers to which wireless operators are clinging as voice Average Revenue Per User (ARPU) declines accelerated during the quarter for the 20 key operators tracked by iSuppli," said Mark Kirstein, vice president with iSuppli. "Across the 20 key operators tracked by iSuppli, aggregate voice ARPU in the first quarter declined by 6 percent sequentially compared to the fourth quarter of 2006. Meanwhile, mobile data ARPU increased by 1 percent sequentially. Data ARPU is particularly strong among North American operators, where both messaging revenue and mobile multimedia content are seeing strong growth."

iSuppli also found that:

• For the 20 key wireless operators, nearly 20 percent of revenue is now associated with data. Three of these operators derive more than 30 percent of their revenue from data: SK Telecom, NTT DoCoMo and O2.
• Growth in ringtunes is slowing. Asia and Europe are maturing, while heady growth rates in North America moderate. The top five markets for ringtunes are China, Italy, Japan, the United Kingdom and the United States in 2011. However, many country-level markets will peak before 2011.
• Mobile gaming growth is slowing significantly, particularly in Asia. Korea and Japan had the dominant positions n 2006.
• Among mobile content companies, game publishers Glu Mobile and Square Enix each gained market share during the quarter, while Electronic Arts and THQ each lost about 3 percent share. Universal Music group holds the largest share of mobile music content revenue among the major record labels.
• Several U.S. operators saw revenue associated with messaging double in 2006 compared to 2005, driven by both increased peer-to-peer messaging and increased premium Short Message Service (SMS) revenue.

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Posted to the site on 28th June 2007