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Ringtone revenue to decline
New research points to a declining mobile ringtone
market and a rise in digital music downloads
15 January 2004
A new study from Juniper Research finds that the
market for mobile ringtones has already peaked, and is now showing
signs of saturation and weakness. Worth just over $1bn (worldwide)
last year, the sector is forecast to slowly decline to around
$490m by 2008.
In contrast, the analyst firm believes that the
digital music sector (from master recordings) will continue, in
part, to adopt the mobile platform, and generate direct revenues
of around $560m by 2008. Whilst this is a conservative estimate,
Juniper believes there are still significant hurdles yet to be
faced by the sector. For instance, users will continue to download
music via their fast home connections and update their mobile
devices locally. Other hurdles include:
- Copyright, licensing and distribution – the sector still
has some fundamental issues to resolve before it can fully grasp
the mobile opportunity.
- Security & Rights Management – Winning the battle
against the internet pirates is key, with encryption and digital
rights management (DRM) still at the top of the agenda.
- Pricing & Cultural Acceptance – Understanding consumer
behaviour and attitudes will be absolutely key in positioning
and pricing these new mobile music services.
- Device Availability, Functionality & Cost – The
opportunity for the music sector is directly tied to the number
of capable devices and networks.
Paul Skeldon, Senior Analyst at Juniper Research, and mobile
entertainment specialist comments:
“The ringtone market is already showing signs of being
a passing fad, and is in many social groups, already consider
‘naff’ and annoying. The use of the mobile channel
to distribute master recordings of music is however one that is
being eyed with considerable interest by both the mobile and music
industries. While the use of the mobile channel as a top- up medium
for portable MP3 players is one aspect, there is growing interest
in using mobile as a way of selling music promo material to encourage
the purchase of more traditional ‘hard copy’ music.”
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