Research Overview
Efficient Management of Processes to Aid Mobile Service Providers in Capitalizing on Thriving Mobile Music Market
Mobile music services are emerging as major revenue contributors in the mobile communications sector and carriers need to manage their portfolios efficiently to capitalize on the booming opportunity. They need to consider various applications, legacies, network technologies, billing, outsourcing, and development mechanisms for presenting an effective product offering to end users. Besides this, they also need to decide on their level of involvement in the development and delivery processes of mobile music applications. It is necessary to strike a viable balance between devoting a team entirely for this process, or outsourcing to a third-party and working on a revenue sharing basis.
This Frost & Sullivan research analyzes different mobile music applications such as monophonic polyphonic
and, master music ring tones, streaming music, and other applications that create value for mobile subscribers. It examines different applications, platforms, business models, and revenue sharing agreements in the industry and identifies drivers, challenges, restraints, and application trends.
Mobile Music Services Prop up Falling ARPU in the Mature U.S. Mobile Market
The U.S. mobile market is verging on maturity and now with the commoditization of voice minutes, intense price wars are translating into declining average revenue per user (ARPU). In a bid to improve profits under these circumstances, mobile operators are focusing on offering value-added non-voice services. "Offering a rich and satisfying mobile music experience constitutes an important part of the strategy of achieving greater returns per subscriber and also contributes to customer loyalty," says the analyst.
The music industry, which is already battling piracy issues, is increasingly turning to mobile networks as an effective and secure distribution channel for their music, thus boosting the prospects of the mobile music market. However, a plethora of intellectual property laws regarding music could lead to reduced revenue and increased complexity. The limited storage space of mobile handsets and the large footprint of music applications also deter their downloading.
Master Music Tones Poised to be Prime Drivers of Mobile Music Markets
"Aiming to make handsets a preferred mode of listening to music, the mobile handset industry is enhancing their audio playback and storage capabilities to accommodate master tones and MP3 downloads," says the analyst. This move is significant since master music tones and other high-end applications are set to emerge as key contributors to the U.S. mobile music industry, having already posted impressive growth rates in 2003 and the first half of 2004. This growth is likely to continue and soon phase out monophonic ring tones.
With the introduction of sophisticated mobile phones, operators are expected to be able to increase adoption of mobile music services. With growing consumer awareness about mobile music applications and a satisfying user experience, mobile operators can be assured of greater returns per subscriber.
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