New forecasts out today for the mobile music market from Juniper Research: it will bring in revenues of $5.5 billion by 2015, compared to $3.1 billion last year. What’s interesting is that mobile music might just turn out to be more competitive than the digital market overall. While digital music is dominated by Apple’s iTunes, dozens of companies are piling into mobile music looking to capitalise on the opportunity, as long as the pesky pirates don’t get to it first.
Juniper analyst Daniel Ashdown tells mocoNews that currently iTunes makes up about 60 percent of mobile music market. Meanwhile, in digital music overall, iTunes accounts for 66.2 percent, according to December figures from NPD Group.
But while iPods have long dominated the portable, digital music player market (giving a strong push to the iTunes market), in smartphones we have seen a dramatic entrance from Android, and that’s not even considering the still-strong role played by Nokia (NYSE: NOK), as well as BlackBerry and others. Each of these platforms has been breeding a number of native and app-based music services, as well as offerings from mobile operators, which are all continuing to vie for business against Apple.
Just in the last day, Spotify raised $100 million to expand to new markets and platforms, and Verizon launched a new V-CAST mobile music service in the U.S. There are also reports that Google (NSDQ: GOOG) might be gearing up for its own Android music store to rival that of iTunes.
In its new report, Juniper points out that as mobile (and digital) music rise, the overall value of the music market will continue to fall, making these kinds of digital services ever-more important. Currently the record labels are making around 20 percent of their revenues from digital music, although at least one, EMI, is forecasting that to go up to 30 percent by 2013. A graphic representing figures from the IFPI shows the progress of that digital growth, and overall decline:
That’s not to say that all digital music services will work. This year we have already seen a u-turn from Nokia on its unlimited music download service. The company has promised a new service soon, which might link up with Microsoft’s Zune, now that the two have joined forces for smartphones.
And Apple (NSDQ: AAPL) is not sitting still, either. In addition to its new subscription charges, which could end up batting away the more alluring of upstarts, Apple, and other retailers, are now reportedly now in talks with record labels to work on improving the quality of downloaded music: if one retailer gets a quality edge over another, that could be a key differentiator in a sea of me-too mobile music services.
Juniper’s numbers leave some big questions unanswered: how big of a share mobile music is of the music market altogether, for one? The IFPI, in its annual report released in January 2011, says that digital music sales brought in $4.6 billion in sales worldwide in 2010. But putting that number alongside Juniper’s $3.1 billion for full-track downloads for 2010 would mean that mobile is already 67 percent of all digital sales, but Daniel Ashdown, Juniper analyst, says that he wouldn’t go so far as to confirm that mobile music is that dominant today.
Nor does the report drill down into looking at what kinds of devices are more “music friendly” than others. If Apple is largely as dominant in mobile music as it is in digital music overall, are the company’s iPhones also the most popular mobile music devices?
Ashdown says that for the moment, downloads are still the mainstay of mobile music users — a fact that is helped along by smartphones phones getting ever-more storage capacity. But he also says that a number of new music brands, such as Rdio and Spotify, are slowly leading a shift in consumption to streamed services.
So what can possibly hold up the pace of progress? The pirates, of course. P2P file sharing is getting more prevalent on mobile devices, as are apps that encourage this, for example a BitTorrent client — creatively named “BitTorrent Client/aBTC” — already in the Android Market.