Mobile music will thrive despite ringtone dropoff

Ringtones, typically mobile music’s saving grace, took a hit in 2008, but not enough to effect mobile music’s overall growth. Global revenue from mobile music services will reach nearly $14.6 billion by 2013, according to a Juniper Research report, and a sharp fall in ringtone revenue will be more than offset by growth in full-track downloads, streamed music services and ringback tones.

Mobile music has been a challenged service, up against handset form factor and memory constraints and data costs, although most of these hurdles have been significantly reduced, according to report author and Juniper principal analyst Windsor Holden. These factors, along with an increasing willingness of major labels to participate in mobile ventures and the proliferation of user-generated content – primarily content uploaded to social networking sites or user-created ringtones– are driving the push for mobile music adoption and usage.

Jim Donio, president of the National Association of Recording Merchandisers, confirmed that there is growing interest in the music community to make the move to mobile. The industry organization, which now includes AT&T, Verizon, Nokia and iTunes in its membership, is focused on merging the worlds of digital music with mobile platforms.

“All the companies are open to the mobile opportunity, and both want and need to learn more about what the opportunities are for partnerships and serving consumers,” Donio said. NARM started a New Formats committee in response to this need. The group -- made up of mobile companies, traditional retailers and labels -- discusses ways to bridge the gap between new formats and content. “Getting new opportunities for access and touch points is so important for artists and genres of music to expand their scope. The mobile applications have opened up paths forward that we probably wouldn’t have even considered as recently as a handful of years ago.”

Apple is largely responsible for carving out this path. The iconic iPhone-maker took home Juniper’s Gold Future of Mobile award at last week’s Mobile World Congress in Barcelona for spurring interest in full-track downloads across the industry. The combination of a handset with a wonderful user interface and music player and an easily accessible, user-friendly music store is irresistible, Holden said. Until Apple came along, the a la carte business model has not performed to expectations due to flawed service discovery on all levels of the mobile platform. The network operators hold most of the blame for this, he added.