Mobile music downloads hit the right note

Global spend on music downloaded to mobile handsets is forecast to rocket to $32.2bn by 2010, up from $13.7bn in 2007, according to industry analyst Gartner.

The analyst anticipates that carriers will overcome a host of challenges in delivering these services, with two distinct factors driving uptake: personalisation and entertainment.

Stephanie Pittet, principal research analyst at Gartner, said that while the mobile music download market is growing from a small base, it represented a good revenue opportunity for providers that “get it right”.

The analyst believes that mobile carriers have a strategic advantage when it comes to delivering ringtones because they already know the end user’s network settings, handset and personal preferences.

“However, when it comes to the entertainment side of mobile music like streaming and full track downloads, they risk losing share to other players, which might include device vendors, record companies and other solution providers,” Pittet said.

Despite strong competition form the likes of Apple’s incoming iPhone device, Gartner says mobile carriers still have ample opportunity to secure a new revenue stream, mainly because it is easy to target customers with personalised content via their unique SIM card.

“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,” Pittet said.

Spending on mobile music varies dramatically from region to region, with the market in Asia Pacific worth more than twice that in North America. In 2005, Asia Pacific made up more than 41 per cent of the worldwide spend on mobile music.

Asia Pacific is likely to lead the way when it comes to downloads of full track content to mobiles. Countries like Japan and South Korea already account for the majority of full track downloads to mobiles. But at present, the opposite is true in North America, where users favour PCs and prefer to sideload content.