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Mobile Music Keeps Humming As Music Industry Shrinks

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juniperIf you’ve followed the music biz’s uncomfortable adaptation to the online age, you’ve probably heard this one before: One segment within the industry is taking “a larger slice of a shrinking pie.” A new study from U.K.-based Juniper Research forecasts modest growth worldwide in mobile music over a five-year period, as the larger music industry continues to founder.

The report estimates that end user-generated revenue from mobile music will rise to $14.6 billion in 2013 from $11 billion in 2008, with full-song downloads and streaming services driving much of the growth. Faster networks and larger handset storage capacity are stimulating consumer interest in over-the-air downloads, which presumably cannibalize some PC sales. At the same time, however, the study shows that consumers appear to be losing interest in paid ringtones, which the study calls “less attractive when priced at a premium to full-track downloads.” (Polyphonic ringtones, which are most commonly digital simulations of familiar songs, are singled out as “last season’s wardrobe” compared with so-called truetones, which are excerpts from popular tracks, although the study says the latter’s novelty is wearing off as well.)

Despite growth in some segments, especially in Asia and Western Europe, the study acknowledges that consumers’ discretionary spending is still weak, and suggests that confusing user interfaces, incomplete network coverage, and cost of data services remain significant hurdles to consumer adoption of mobile music. In addition, the study said that advertising-driven business models will continue to suffer, with ad spending in the sector falling by as much as 50 percent from pre-downturn estimates, while paid subscription services continue to emerge as viable alternatives.

As network and bandwidth problems are gradually being solved, entirely new questions have begun to arise that could further upset the roiling music business. (Here’s one: Who will buy a song on a cell phone when it’s available for free streaming, anytime and anyplace?) But for now, mobile services are a bright spot in a suffering industry, taking advantage of the shift toward cloud-based services and offering new opportunities as phones replace MP3 players as the handheld device of choice for music consumers.

18 Responses to “Mobile Music Keeps Humming As Music Industry Shrinks”

  1. 45-50 years. I think you’re being very generous. To think how far we’ve come in just 10 years. The industry was completely flipped upside down. Now everyone is struggling to jump on the hottest thing. Loads of sites and services came around trying to grab on to the ringtones. Now it’s going down but how long did that last? Technology and the way people consume music, especially in the last few years has been switching up as often as most people change their underwear.

    I’d give CD’s a much shorter life span. If anything, with all the video being taken everywhere, artists will probably be putting out Blu-Ray disks which include the album to give consumers more for their buck. It would be a step up from having only the album and a seperate promo DVD like a lot are doing now.

    As far as CD’s, we still have good old record stores and physical records are becoming collectors so I assume the same would happen to CD’s. They might even be more attractive to buyers if artists and labels start replacing them with another media and decrease the amount of copies floating around to only the true fans who are the same people buying the band’s underwear with their logo. Man, a lot of talk about underwear in this comment … At least it’s one thing that may last over 50 years, hehe.

  2. What’s happening is what I always said would happen: digital downloads/mobile stuff is the future and will grow, CDs and the like will continue to shrink as the prices haven’t really gone down any in years, and eventually (maybe 40-50 years or so), CDs will be pretty much extinct.

  3. Innovative apps may also contribute to music sales. People are making attempts to use music on mobile in different way. For example Gailoo Tune (can be downloaded from application playes music for caller during ringing stage. If someone download a new music and sets it as ring tune all his callers may hear that tune for short period and if caller really likes it he may also decide to buy it. Such application can help wide spreading of tunes …basically free marketting for artists and records. Hope to see more applications like that.