A new research report says that full-track mobile downloads increased 20 times in 2005 (via Abiro) over the previous year, with global revenues leaping from $12.4 million to $251 million. Let’s focus on that, rather than the ridiculous prediction that the number will be $9.3 billion in 2011 (since there’s no telling how they got it).
First, let’s discount Japan. KDDI’s Chaku-Uta Full service has been growing like crazy for a couple years now. Last year, it did about 29 million downloads, finishing with a rate of about 10 million tracks per month. Songs cost about 300 yen (about $2.50), so it accounted for about a quarter of the world’s total. And it sold less than 1 million tracks in 2004, so its growth outpaced the world as a whole as well.
Other operators are reporting successes too: 3 UK says that it’s sold its millionth full track in about four months since its service launched, which MocoNews points out is a similar timeframe to Sprint in the US (though it’s unclear how many of its downloads were free promos). 3 is also touting its strength in the British singles charts, saying it’s responsible for 3.7% of the country’s singles chart and 7.5% of the digital download chart. Keep in mind, though, that when Apple launched iTunes in Japan, it sold a million songs in four days.
I’m going to be a little more skeptical than the firm behind the report (surprising, I know), and venture that many of the current downloads can be chalked up to promo deals (Sprint gave its users 5 free downloads, for instance) and early adopters, and have come in spite of some drawbacks in the shape of high prices and problematic DRM. Both of these manifest themselves in limiting competition — so imagine what the growth could be like if they were sorted out.
There are signs things are beginning to change, though — for instance, Vodafone is now wholesaling GPRS access to music-store providers, letting them establish a fixed price for downloads, rather than “£1.50 plus traffic charges”. It still gives the operator a significant advantage, though, as eating the cost of providing the file to a user is far easier for them than for an outside supplier.
Pricing undoubtedly remains an issue, though, with operators’ services typically charging double the price of download stores like iTunes. Their argument is that there’s a premium in providing users the ability to download songs at any time from anywhere, and it’s an argument with which I still don’t really agree. But whatever the answer to that is, I think they’d be hard pressed to deny their services are much more attractive — and would gain far more users — at market pricing.
Update: The UK’s Official Charts Company says 7% of the music that accounts for the charts this year has been sold via mobile, about 70,000 tracks per week.
[tags]sprint, 3, hutchison, 3g, mobile music, vodafone, kddi, chaku uta[/tags]
Full-Track Downloads Taking Off, Apparently…
Remember that concept for downloading mobile music that we kept hearing about? Ya, you remember. Well, it seems these puppies are really start to move out the door; or onto the phone, rather…….
[…] ABI Research has predicted that global revenue from mobile music (including ringtones) will explode over the next five years. “People with handsets spent $251 million last year on music tracks, ring tones and ring-back tones, compared with $12.4 million in 2004, ABI Research said. By 2011, mobile phone subscribers are expected to spend $9.3 billion.” I don’t know how they got the figure, but it states that the mobile market will be 37 times bigger in five years than it is now. It’s possible, I suppose — ABI expects most of the growth to come from Asia and other regions with a low penetration of internet-connected PCs, which offer an alternate route to digital music. Once those markets start getting better networks and reasonably-priced music services they’ll probably take off, even though copyright infringing activity is higher. Carlo at MobHappy opined that most of the growth of the past year came from promotional deals, although that represents songs rather than revenue. Still, if the carriers (such as Sprint which offered 5 free downloads) paid the labels for the promo songs it would still be revenue. If that was the case the growth is unlikely to be sustainable. I think it is tricky to make predictions on the size of the mobile music market in the future because it depends not only on what the carriers do, but also what the labels do and what online music services do. […]
Video downloads more profitable than singles…
Our strategy of having cups of tea with interesting people continues to pay off. Having a chat with Charlie, the smartest man in music marketing, we learned that over the last few releases for Nelly, more revenue has been earned…