Mobile money spinners

With the mobile music industry set to be worth US$32 billion in 2010, content delivery specialists are eagerly spying new market opportunities in the sector.

With annual revenues generated by mobile phone music downloads set to double over the next two years, content providers and telecommunications specialists are in the box seat to capitalise commercially.

Recent research by US-based market analyst Gartner predicts that revenues will rise to US$32.2 billion by 2010 - up from US$13.7 billion in 2007 - despite competition from digital music player manufacturers and a host of challenges faced by telecommunications carriers in delivering these services.

Mobile music, which includes services from basic ringtones, 'realtones' and ringbacktones to more sophisticated full track downloads and streaming, has existed since 1998 when the first ringtones were commercialised.

It is the second most popular mobile data service, despite falling considerably behind short message service (SMS) in terms of use and revenue. According to Gartner, two distinct factors are driving the use of mobile music: personalisation and entertainment.

The use of ringtones and ringback tones is part of the trend to personalise mobile phones as a form of self-expression.

However, the mobile phone can now be used to play music, in some situations replacing portable music players like the popular iPod for entertainment.

Stephanie Pittet, principal research analyst at Gartner, says that while mobile music was growing from a small base, it represented a good revenue opportunity for service providers that "get it right" from the outset.

"Mobile carriers have a strategic advantage when it comes to delivering ringtones, as they already know the end-user's network settings, handset and personal preferences."

"However, when it comes to the 'entertainment' side of mobile music like streaming and full track downloads, they risk losing share to other players, which might include device vendors, record companies and other solution providers," she explains.