Wireless Music Services To Ring Up Revenues?

Mobile operators, device manufacturers, third-party developers and global media giants are all lining up to cash in on mobile music services that go far beyond ringtones reveals BWCS' latest report Pump Up the Volume: Unleashing Revenue Potential With Mobile Music Services. This 100 page report, based on one-on-one interviews with key players and senior executives, details how companies are gearing up to get more mileage out of music content and generate more revenues per subscriber.

"Mobile music represents a great opportunity to build brand and drive results, if companies get the business model right," argues report author Peggy Anne Salz. "Many of the leading players we spoke to for this report are moving full-steam ahead on a raft of music services. These will be more than just showstoppers; they will be to mobile what MTV was to television. They will revolutionise mobile entertainment."

"The runaway success of ringtones shows that music content is already a money-making business," Salz says. "The market has been downbeat about mobile music services because it assumed that these services must revolve around downloads. It's true we lack the devices, the bandwidth and the proper digital rights management for this particular kind of mobile music service, but we do have all the pieces necessary to create a slew of much more innovative services around the interaction between music fans and their idols."

This qualitative report sheds light on many of the players jockeying for position in the mobile music market. It examines the mobile music offerings that are in the pipeline, as well as the opportunities around services to deliver lifestyle content and promote mobile communities.

Pump Up The Volume also includes case studies that illustrate how leading mobile operators already generate revenues delivering music and music related services, and reveals how media companies, concerned that physical music distribution channels are threatened, plan to push the mobile music market forward - and are themselves fast becoming application developers. While some are gaining ground others are in danger of being marginalized.

"Up and down the value chain companies are moving on music services - partly because they sense a business opportunity and partly because they have little choice,", Salz argues. Global CD sales are slipping; a trend that forces record labels to seek new revenue sources. Handset manufacturers, anxious to reinvigorate a sluggish market, are also moving forward with ambitious schemes to offer users an "out-of-the box" music experience complete with embedded ringtones and logos. Finally, mobile operators, squeezed by increasing competition and starved by 3G investments, are glad to deliver any service that will encourage interaction and hence generate more revenues.

Against this backdrop, companies are coming up with new schemes to strengthen the link between the user and the artist. Offers range from simple news and concert alerts to services that provide users with advice, music recommendations and shopping tips from their favourite artists. "With mobile services, the companies can take the concept of a fan club or a fanzine to a new and much more lucrative level," Salz says.

"Music is a consumer magnet. Users download ringtones to personalize their phones; they congregate in chat rooms to talk about favorite artists; they participate in music voting, entertainment and promotion campaigns; they send song snippets to friends and dedicate tunes to loved ones on special occasions. Indeed, users reach to the mobile to create and communicate the music that is the soundtrack of their lives. And, if companies in the mobile space regard the next year as a ramp-up period, then they can cash in on a huge market opportunity."

Moreover, companies are just beginning to get their heads around how they can combine music and MMS to deliver users a compelling 'plug-and-play' multimedia experience combining high quality audio, images and video music clips. "The jury may be out on which services will emerge the killer apps, but there is a consensus that mobile music is one of the few growth stories left in the market," Salz notes. "The message is to get down to work now in order to identify the music features and services that will fly."

Rather than focus on enabling music file downloads to mobile devices, companies should develop and test services that aren't affected by factors such as memory size, playback capability and cost of download, Salz says. Such services could include music gossip news, song dedications and personalized interaction with the artist in the form of IVR exchanges and on-demand interviews. Players should also concentrate on improving and personalizing music ringtone, icon and wallpaper packages.

With mobile phones becoming the most important consumer item among young users, music represents a vital connection to this sector which serious players in the mobile market will ignore at their peril.

This Press Release Sponsored by AGILENT TECHNOLOGIES

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