Music in China – Monetization Through Mobile Platform

Investment bank Piper Jaffray’s China Analyst research report has come out with a note on the Chinese mobile music market and the players involved with it…among some points:
— In both the U.S. and in China, young people who will almost never pay to buy a CD or download legal copies, happily pay $5-$20 per month in the U.S and $1-$4 in China, substantial sums in both countries, for ringtones. What they are telling us and the industry is that they are willing to pay for music, but only on their terms.
— We estimate the Chinese mobile music market size to be approximately $200-$400 million in 2006 consisting primarily of
ringtone and caller ring back tone sales.
— We believe the biggest beneficiaries will be the operators and content creators, but we believe there is also a large opportunity for distributors and intermediaries.
— We believe wireless services providers such as Tom Online, Kongzhong and Hurray are in a good position to potentially benefit from the growth of mobile music services, both through expanded ringtone services as well as full streaming or downloads.

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