It’s no secret that the music industry got snowed by 13-year-old boys on Napster (and its predecessors). First, they fought tooth and nail against this digital revolution. Then they accepted defeat, brushed off their egos and tried to play catch-up, devising myriad monetization schemes (none of them as good as free.)
But they won’t make the same mistake twice. Mobile is the next frontier for music, and the industry is getting on the gravy train early. The worldwide mobile music market will more than double in the next few years, exploding from $13.7 billion this year to more than $32 billion by 2010, according to Gartner study. In Japan, most digital music is already being consumed on mobile phones. BBC Click offers some insights as to why:
Downloading via mobile offers the user the ability to browse a store’s back catalogee, purchase and download music all via a mobile phone while on the move, cutting out the need to download songs using a computer.
Adam Benzine said: “Pretty much everybody in this country [England] over the age of 12 has got a mobile phone with them, not everybody has got a music device with them, but everybody has got a mobile phone so you’ve got an immediate captive audience.”
It’s obvious why the music industry wants a piece of the pie. But as RCR Wireless News pointed out, it is getting sliced many times over.
“While boilerplate agreements don’t exist in the world of ringtones, music labels generally get about 50% of revenues from the music clips, and carriers demand roughly 40%. The remaining 10% goes to the distributor-as does the responsibility of making sure everybody else in the value chain gets a taste.”
So what does that mean? The revenue chain is getting more diluted and complex as times goes on. That coupled with the current low demand in the US makes it all well, complicated. But is it viable? Can carriers beat the iTunes 99 cent price point and make sure everyone–including the industry and artists–get paid? Well, they sure are trying:
- Apple’s iPhone downloads songs using wi-fi from its already successful iTunes store.
- Nokia has launched its own store, another download-to-own option. It is also planning a subscription service which allows users to keep the music they have purchased after the subscription has expired.
- Mobile music company Omnifone has teamed with networks in the UK, Sweden and Hong Kong to provide a subscription-based service called MusicStation.
- ATT offers Napster to Go (straight to the handset) and eMusic Mobile (via USB cable from a PC), and you can stream music via MobiRadio
- Verizon’s V CAST Music catalog has a catalog of 1.3 million songs that customers can subscribe to download for $15/mo.
- Monstermob offers off-deck music in Europe
- Sprint Music Store powered by Groove Mobile is the first off-deck solution. It lets wireless customers download music from EMI Music, Sony BMG Music Entertainment, Warner Music Group and Universal Music Group for $2-2.50 a song.
Limitations abound with many of these services, however, compatibility being the major issue. But the Sprint initiative marks a move away from restrictive carrier-based content towards off-deck alternatives (like Monstermob). The service lets consumers on any carrier buy tracks by sending a text to a short code. Meanwhile, some artists are already bypassing labels and doing their own thing on the handset, just like on the web.
So while a thriving mobile music is a bit down the road in the US, the popularity of music-driven phones and all-in one devices is a harbinger of what’s to come. Also, a look to Asia, where digital music sales are rising (by 1%!) thanks to mobile, could be an indicator of its future here–a future that will likely reside off-deck.
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