Thursday, January 10, 2008

US Mobile Music Worth $1 Billion In 2012: Report

"Digital music in the United States will increase from $1.98 billion in 2007 to $5.34 billion in 2012 according to the Yankee Group, but mobile will only account for 20 percent of that, or $1.068 billion. Overall this will not replace lost CD revenue, but Yankee avoids the mistake of saying that the “music industry” is in trouble—it’s actually the record labels which are in trouble, and the analysts predicts that artists will increasingly keep the lion’s share of music revenues by selling directly to the consumer. In terms of handsets, Yankee predicts that by 2012 there will be 266 million music-capable handsets in the US, but only 9 percent of mobile users will actively use their handset as a portable music player. Mind you, I would like to see what percentage of the population actively use a portable media player of any type…"

My first reaction to this was big yawn. Seen enough 5 years ahead reports on almost obvious stuff. Yes, everyone's about music in some level, yes there is high integration to mobile phones, duh.

The report is very relevant around "direct to consumer" and that the record labels are in trouble. People begin to realize how many middle men are between the content creator and the consumer. Rightfully, they want those removed, or reduced.
In the wireless world, operators have been great at providing better than ever technology and throughput. They brought the mobile web to phones. Device vendors are making unbelievable web & Multimedia phones. Which brought both to struggle whether they are technology vendors or want to go into the content business.
The answer is that the wireless content business is best managed by content aggregators on behalf of people like the labels and artists. You can distribute content directly from the web today. Reduce operation cost by one deployment fits all. Everyone, the operators, the vendors and the content owners all get a piece of the cake. further, subscribers get ubiquitous, optimized experience, sometime cheaper.
It's a no-brainer. Some UK operators get it, some in the US. It's just a question of time until everyone will get it.


Anonymous said...

And what about china where music is the most pirated one??

Amir Rozenberg said...

Thanks for your comment.

What's interesting about China and Asia as a whole is that the ratio of people that have access to PC & web vs. access to phones is unique.

As long as people find their phones as device of choice, and music sharing on phones isn't widely supported, I believe PC piracy will not have a huge effect on this evolving market. Keeping in mind, piracy usually targets proven mainstream markets, meaning that it's not something we should not consider as a future potential threat.
I believe you could quite easily find numbers on the web to support the above.
Thanks again, Amir