With the value of global music sales forecast to decline in the next couple of years, the significant increase in ring tone revenues has provided the music industry with a much-needed boost. According to Mobile Music, the latest briefing from Baskerville, authors' societies collected US$71 million from ring tone sales in 2002. This marked an increase of 58% on the previous year ' s total of US$45 million. Most of this growth came from the U.S. and European countries.
Mobile music is a dynamic new market, which is likely to expand significantly. At the moment the vast majority of revenues are generated though the sale of ring tones. This sector has grown at a phenomenal rate, despite the limitations of sound quality. However, the ring tone market is likely to pave the way for the eventual uptake of more elaborate mobile music.
Music and the mobile handsets fit perfectly together as the mobility of music has become an important part of consumers ' music consumption, most recently in the shape of the CD Discman. As such, making a connection to the mobile phone is a natural upgrade. Cellular networks also have a microtransaction billing infrastructure already in place and are an ideal platform in brand and user demography for record labels.
The mobile and music industries are currently witnessing their traditional revenue sources being undermined, causing them to seek new sources of income. The music industry is looking at ways to find new revenue opportunities to make up for the massive leakage through fixed internet applications. Mobile operators are seeing voice ARPU eroded, and are looking to data services to generate an increasing amount of their income.
However, there remains both commercial and technical obstacles to a successful future for mobile music services. While commercial negotiations are likely to be hampered by the vested interests of the music and mobile industries, technical obstacles includes advanced handset penetration rates, network speeds and a lack of DRM implementations."
Posted to the site on 16th January 2003
Posted to: www.cellular-news.com/story/8145.php