A few interesting tidbits surfaced during an interview between Rio Caraeff, EVP of Universal Music Group’s eLabs, and CNet, that implies that mobile music may not be as far behind as some people thought. Caraeff said that mobile makes up nearly half of revenues from its digital business and that Google’s Android operating system, which has an Amazon (NSDQ: AMZN) music store built in, represents Amazon’s biggest third-party relationship ever. At CES last week, Atlantic Records also said that mobile makes up a good chunk of its overall digital sales, but no where near half. Here’s a few highlights from the article, which can be found in full here.
The scope of mobile business: In two years, Caraeff said he built a very large mobile business, in excess of $100 million, which includes a distribution network with every wireless operator and every device manufacturer. He said 40 percent to 45 percent of the company’s overall digital business is coming from mobile channels like Verizon (NYSE: VZ) and AT&T (NYSE: T). In terms of products, they are diversifying away from ringtones, and have launched ring-back tones, and voice and video tones, full-length music sold over the air, and mobile video services that were both paid and free to consumers under ad models. They also have merged their mobile and online divisions, so that consumers can experience music across the two platforms. In terms of pricing, the company charges the same for a track whether it’s on a cellphone or a PC. For artists such as Fergie, Rihanna and Pusscat Dolls, he said “we’re seeing mobile comprising 20 percent to 45 percent of the revenue for those artists.”
Amazon’s mobile music store: Caraeff said the company helped Amazon launch its music store on the Android platform “and now Amazon will tell you that Android is their single-largest source of downloads from any third-party partnership that they’ve ever done.”
Android’s potential: Although he’s seen good results on the new platform, he calls it “early days on Android. There’s not that many out there on T-Mobile, but even with the small amount out there, they’re downloading and purchasing a ton of music over the air on T-Mobile.”