ABI: Mobile Music to Reach $9.3 Bln by 2011

A new report from ABI Research predicts the worldwide market for over-the-air mobile music downloads will grow from over $250 million in 2005 to $9.3 billion in 2011.

If those figures seem excessive to American sensibilities, consider the North American digital music and mobile phone markets are somewhat different than the rest of the world. According to ABI, over-the-air music sales in North America have been less successful in North America than in other regions (particularly Asia) because of the greater penetration of personal computers. In North America, consumers are more likely to purchase, download, and manage digital music using their PCs than their mobile phones. In Asia, the market penetration of mobile phones is much greater than the personal computer, and 3G mobile networks have been operational and available for a longer period of time. “There wasn’t even a Japanese iTunes store until Q4 of 2005, said Ken Hyers, Principal Analyst, Wireless Connectivity Research. “That’s part of the reason KDDI sold 30 million mobile tracks last year in Japan alone.”

According to ABI, there are five key components to a successful over-the-air music download service:

  1. Functional 3G mobile networks;
  2. Music distribution mechanism (e.g., a mobile music store) which offers and delivers content compatible with particular handsets, and makes sure users are paying;
  3. Agreements between network operators and either record labels or aggregators (more common outside North America, aggregators negotiate for rights to music from many content providers and offer them in various packages to network operators);
  4. Strong DRM scheme which doesn’t interfere with users legitimately moving tracks between devices; and,
  5. Handsets with sufficient memory and features to support music downloads and transfers.

Soon, we’re sure, we’ll start seeing class action lawsuits over alleged hearing loss from music-enabled mobile phones.