Technology | Media | Telecommunications

Monday, April 29, 2013

Mobile Streamed Music Revenue to Reach $1.7 Billion

Across a variety of formats, music is undoubtedly the most mature segment of mobile entertainment. The global revenues from streamed music services on mobile devices are expected to rise by more than 40 percent to $1.7 billion, according to the latest market study by Juniper Research.

For the first time, these revenues will thereby overtake those generated by full-track downloads to mobile devices.

The study observed that growth in premium service adoption was increasingly being driven by mobile network operator partnerships with service providers. In Europe, several operators have seen an uplift in spend amongst the mobile users, notably TeliaSonera in Sweden, which bundles Spotify with TV, mobile and fixed line services.

Furthermore, such services are also gaining traction in Germany, where O2 offers simfy and T‑Mobile has recently introduced Spotify.

However, the most significant growth has come in the U.S. market, which is poised to overtake South Korea this year as the leading market for mobile streamed music services.


Meanwhile, the study found that leading OTT (Over the Top) players were poised to challenge players such as Pandora and Spotify for supremacy in the streamed music space.

"Historically, companies such as Apple, Google and Amazon have primarily focused on cloud music from a storage perspective; as a remote locker for downloaded tracks," said Dr Windsor Holden, research director at Juniper Research.

Juniper believes that Apple's iRadio service is likely to bring significant pressure to bear on the existing streaming music service providers -- and prompt competing offerings from the other major OTT companies.

However, the monetization of streamed music services was still being severely impacted by digital piracy -- even in markets which have imposed blocking orders on leading torrent sites, the overall rate of torrent traffic has continued to increase.

Other key findings from the market study include:
  • Mobile music services are increasingly context driven and are increasingly evolving social aspects such as sharing, activity feeds and follow options.
  • Revenues from legacy services such as ring tones and ring-back tones will continue to decline sharply, with ring tones in Western Europe now worth just 2 percent of their peak value.