InfoCom says digital music market grows but players trying to unlock it have not much to report

Vigorous digital music market - Better online user experience drives mobile side-loading and smartphone downloading - Mobile music store providers still experimenting with workable business models.

Stuttgart, Germany - The digital music market has been growing steadily and strongly over the last years with online downloads literally driving the market to new highs. In 2009, retail revenues from online downloads alone increased by 40% in France and Germany. On the other hand, revenues from mobile music downloads, that is, downloads directly on mobile phones from mobile music stores, decreased in most countries. There are some few notable exceptions, for instance Japan. Yet, Japan is a strong mobile-driven market, thanks to the comparatively high prices of fixed broadband services and a general, on-going preference for mobile phones versus PCs.

?As a matter of fact, there are increasingly more mobile users that listen to music on their phones", InfoCom Senior Analyst commented, "But they often prefer side-loading music from their PC onto their phones. The user experience of online stores is simply better". Downloads done on smartphones via online platforms, say with android phones from online music stores - through mobile Internet browsing - are commonly not considered as mobile downloads. "As smartphone owners are among the heaviest mobile data users", the InfoCom Analyst continued, "and smartphones are increasingly popular, this partly explains why mobile music download revenues seem to slow down in most markets".

Some vendors and mobile carriers, for instance Nokia and Vodafone, have worked on the dynamics of music, offering mobile music store services. But providers are still experimenting with pricing and workable business models. Among the twenty-six mobile music stores that InfoCom monitors in America, Asia and Europe, nearly 90% offer a price per song (usage-based pricing), around 45% unlimited downloads (permanent or as a rental) and almost 25% song bundles. Noteworthy, in the USA, Verizon Wireless has even introduced a tariff scheme targeting directly "side-load" users: they can purchase and download online their favourite songs - for ?0.50 up to ?0.93 per song, depending on the track - and side-load them afterwards, while the "mobile" download to their phone would cost them ?1.43 per song.

InfoCom Senior Analyst commented further: "The reason why especially carriers remain committed to mobile music is that music is a rather prestigious content market, which improves brand awareness among users and increases mobile users' loyalty".

About this contribution: Mobile music downloads - Towards the mobile music experience is one of the papers included in InfoCom new large scale report Series Mobile Broadband 2010 - Creating Mobile Value, a new series of reports focused on specific topics all around mobile broadband. This report presents the most interesting mobile music applications appeared recently around the world, with pricing, commercial strategies to increase usage and boost revenues as well as the most common business models, providing also striking findings in a concise yet very effective way.

About InfoCom: InfoCom is a market research and consultancy company with over 20 years experience providing strategic analyses and planning assistance to stakeholders in the telecommunications, IT and multimedia industries. InfoCom's independent and fact-based analyses highlight trends and opportunities, supporting decision makers to understand market dynamics in order to improve their competitive advantage.

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