• by Jack Loechner , Staff Writer @mp_research, July 12, 2006

Mobile Music To Beat Online in Five Years

According to a recent IDC study, U.S. wireless music services will have over 50 million users and generate more than a billion dollars in revenue in 2010, just 5 years after appearing in late 2005.

Susan Kevorkian, program manager, Consumer Markets: Audio, said "Wireless OTA music services… brings the music industry new opportunities to reach consumers and drive revenue. Wireless music services… are expected to quickly gain traction during the forecast period. By the end of this year, the number of U.S. OTA customers will be approximately half that of online music service users, but may surpass them by the end of the forecast period.”

According to the IDC survey, a total of 22% of respondents indicated that they would buy at least one track from their service provider within the first three months of availability. Eight percent of respondents age 25-44 indicated they would buy four or more tracks. IDC analysts believe this 25-44 age group could be the core base of wireless over-the-air service users.

In order for wireless music services to reach critical mass, a variety of music-enabled devices need to first find their way into the hands of wireless subscribers. IDC expects music-enabled mobile phone shipments to reach nearly 60% of all handsets shipped in the U.S. by 2010.

OTA mobile music storefronts are emerging as one of the most important new channels for fans to discover, purchase, and enjoy full-track music and related content, says the report. Key drivers for future growth include:

• Music-enabled handset penetration
• Deployment of broadband wireless networks
• Increased marketing efforts
• Bundling and cross-promotion of various music-related services
• Flat-rate pricing schemes.

Lewis Ward, research manager, Wireless and Mobile Communications Entertainment. Said “IDC expects that OTA tracks at about $2.00 each will emerge as a sustainable price point as long as mobile storefronts are well-designed and offer a wide selection of music, and the music listening experience on the device is comparable to MP3 players."

For the complete release, please visit this site.