Mobile Music services generate interest... and revenues

POSTED BY Global Administrator
While the age of the mobile ringtone appears to be coming to an end, a flurry of announcements over the past few days would seem to suggest that – taken as a whole – mobile music is doing very nicely, thank you, and poised to do even better for itself.

First up, there’s the deal between Nokia and Orange to promote the former’s “Comes With Music” service. Under the terms of the deal, Orange will exclusively offer Nokia’s 5800 Comes With Music sim-free edition: the handset – which costs £70 more than an identical handset without Comes With Music – offers users unlimited downloads for the duration of their contract. (News of the deal came as Orange announced the results from the latest edition of its Digital Media Index survey, which showed a 38% y-o-y increase in full track downloads.)

Next, a report in Business Week noted that Pandora, an online service which allows users to design a personalized streamed music experience, had collected six million mobile users over the past two years and – as a result – had seen significant interest (if not – yet – substantial adspend) from brands such as Best Buy, Nike and Domino’s Pizza, which have all launched ad hoc campaigns via the service.

Third, and another music phone hits the UK market – Samsung’s touchscreen M7600 Beat DJ which “lets you mix, scratch and more”. (So if you’re an O2 customer, you’ll now have the opportunity to mix and scratch to your heart’s content.)

And today, a raft of new services from T-Mobile Austria for its Mobile Jukebox service, including 2 million DRM-free tracks, lower download prices (€0.99 per track) and offering new customers 50 free full-track downloads.

These are just snippets; but they are not isolated cases. Full-track downloads may not have yet delivered the kind of revenues served up by ringtones, but the increasing activity across the mobile value chain suggests that (a) service providers are increasingly convinced that consumers are prepared to use mobiles as the delivery mechanism for their music services, (b) those providers also believe that a significant demographic perceive music to be an integral component of their mobile service and that (c) particularly if the numbers coming out of Pandora are anything to go by, those service providers may well be right.

Well, I’m largely of a mind with those service providers – our latest forecasts estimate that revenues from streamed music and full track downloads will reach $5.5 billion by 2014 – partly because of these reports of increased activity from both service providers and end-users, and partly because consumers are self-evidently using their handsets more for entertainment purposes: to download tracks, to listen to concerts, even to film concerts (and then post clips on their social networking sites). I can testify to this last observation: at a Counting Crows gig in Brighton on Sunday (where, I must confess, I was an agnostic amongst a congregation of the converted – the converted including my partner, who bounced along to grungy angst to her heart’s content) I was struck by the fact that about a quarter of the audience were happily filming extended clips on their Nokias and Samsungs and Sony Ericssons, the resulting light show from the handset screens providing a very Mobile 2.0 alternative to the cigarette lighters that used to be waved around a few years ago.

 As Dylan would say, the times they are a-changin’.