Tagged: mobile music

Japanese consumers turning away from mobile music formats in ever greater numbers

Music buyers in Japan are continuing to confound the rest of world, with digital sales falling and physical-format sales rising. Recent figures published by Japanese music trade association the RIAJ show that the once loved mobile music formats are continuing to suffer big drops in sales. Internet sales are growing but nowhere near fast enough to stem Japan’s digital-music collapse. Continue reading

The recorded-music industry is still a US$40 billion business

Over the past decade or so, the assessment of the recorded-music industry has shifted from retail sales to trade value. The complexities and the growing number of business models involved in the delivery of digital music, coupled with unknown retail markups, make quantifying the retail value of recorded-music sales speculative at best. But the enduring appeal of ring tones and ring-back tones in some less-developed countries suggests that the size of the global retail pie has not changed; there are just more players taking a slice. Continue reading

An update on mobile apps and the music industry

Most mobile music services use pay-per-track and subscription-based pricing models, but some operators have started offering music services bundled with their mobile subscriptions. Full tracks are sometimes thrown in as a “free” extra to motivate people to take out a mobile subscription or data plan or to top up their prepaid credit. An example of the latter is Orange’s Monkey prepaid plan in the UK, in which users get free music for topping up as little as £5 (US$7.75).
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Fox Mobile sale shows how far things have moved on from ‘Crazy Frog’ heyday

Coming as it did just two days before Christmas Eve, the announcement went almost unnoticed. But it was a biggie: Media giant News Corp. divested itself of its ailing mobile entertainment arm, Fox Mobile Group (FMG), selling it to industrial conglomerate Jesta Group, a newcomer to the mobile content scene with interests in a disparate assortment of industries, including real estate, hospitality, manufacturing, technology and aviation. Continue reading

Africa looking more like a mobile music market ready for the taking

Looking into the potential of Africa as a possible source of recorded-music sales always seems to end with depressing results. South Africa is the only market with reliable figures as the rest of the region is dominated by piracy. But, the rise in the level of active mobile subscriptions just may provide some hope for the music industry. According to Informa Telecoms & Media, the publisher of Music & Copyright, Africa crossed the half-a-billion mark for mobile subscriptions in 3Q10, reaching 506 million at end-September. Africa accounts for 10% of the world’s mobile subscriptions and is one of the world’s fastest-growing regions – with the subscription numbers increasing 18% over the year to end-September – as a result of the still low mobile penetration rate on the continent as well as demand for new services. Continue reading

Gene Simmons tells TV industry to learn from music business

Rock and TV star Gene Simmons told the TV industry that branding is everything and it needs to better embrace that. In a conference session at the MIPCOM TV market in Cannes hosted by Infoma Telecoms & Media’s Peter White, Simmons said the TV business needed ‘a kick in the pants’ and ‘needs to get sleeker and hipper.’ Informa is the publisher of Music & Copyright.

Simmons was in town to celebrate his A&E reality series Gene Simmons Family Jewels hitting the 100 episode mark and in a keynote address, he spoke to delegates about how he had built the brand of his rock ban KISS and built the TV show from a special to a long-running series.

“It’s your professional duty to make sure your brand spreads,” he told delegates. “I would rather be Disney than Sony, Lionsgate or Paramount – brands mean everything.”

A&E Network and BIO president and GM Bob DeBitetto explained how the Gene Simmons show had been used to build the A&E brand as it repositioned itself from ‘PBS with commercials’ to a more mainstream entertainment offering.

“We always look for shows that can help us differentiate ourselves,” he said. “When I saw the special with Gene it struck me how different it was – there was something unexpected about a rock star who is also a phenomenal family guy. At that time we were trying to reinvent A&E with programmes that surprised people. [KISS and Gene Simmons] were a bigger brand than we were and I thought why not try and get next to that.”

Simmons went on to say that KISS was the pioneering brand in exploiting the brand across all available platforms and that rights owners should heed the lessons of the music business and protect their intellectual property at every turn.

“Be litigious,” he advised delegates. “Sue everybody, take their houses, their cars. The music industry was asleep at the wheel and didn’t have the balls to sue every freckle-faced kid who downloaded tracks.”

If you want to hear what Simmons said then watch the interview in full.

Music & Copyright is a fortnightly research service published by Informa Telecoms & Media.

Is anyone making any money from streaming?

There seems to be a considerable debate at the moment about whether or not artists and rights holders are earning significant revenues from streaming. The debate was started by an analysis by Billboard magazine on the worth of online streaming to artists. It described the earnings by the top artists from on-demand and non-interactive streams as being “shockingly low”. One notable finding was that only 10 out of the 100 artists analyzed earned above US$2,000 from non-interactive streams last year. Beyonce was top with just US$5,000. Billboard concluded by saying that it was understandable that artists and music companies were nervous when it comes to supporting streaming as the future of the music industry.

Earlier this week the Billboard findings were picked apart by the Radio and Internet Newsletter (RAIN). It contacted US digital-recording-rights-collection body SoundExchange to try and verify the Billboard analysis. SoundExchange gave a very different view to Billboard, with its spokesperson describing some of the findings as being “wildly off the mark”. SoundExchange was also quoted as saying that “more than a thousand artists received more than US$2,000 from SoundExchange for non-interactive webcasting only”. In addition to this revenue source, SoundExchange also collects royalties from other non-interactive streaming services via satellite and cable. One other interesting statistic provided to RAIN by SoundExchange was that the top earner from Internet radio made a six figure sum.

One figure Music & Copyright can add to the pot is that the online radio service Pandora made a payment to SoundExchange last year of around US$30 million. We have calculated that Pandora accounts for about 1% of all US Internet radio, so although the total sum paid is still small, it would be wrong to dismiss it altogether.

RAIN was quite right to conclude that Internet radio “benefits artists in many ways beyond simply the royalties it pays”. It also suggested that it should not be judged simply by its worth “on the royalty revenue it generates for artists”. There seems to be a clamor at the moment for digital music services to make large sums of money for artists and music companies quickly. Such demands are, on one hand, understandable, with music companies having lost so much through online file sharing. But to decry a new service as not worth supporting just as it is becoming established, and at a time when large numbers of consumers are still downloading music through P2P with artists and music companies receiving no returns, is surely a mistake.

Comparing the Billboard/RAIN findings with other countries around the world is difficult. Most European collection societies publish online revenues as one figure. In the UK, for example, total online revenues increased by 81% between 2007 and 2008. However, it should be noted that this was from a low base (£9.7 million to £17.6 million). No details are available for the different online revenue streams. But, although it is safe to conclude that no one is going to become super rich on streaming alone, the important thing at this stage is that services are being licensed and are contributing to the legal mix.

Music & Copyright is a fortnightly research service published by Informa Telecoms & Media.

Nokia stands by Comes With Music despite lack of convincing figures; Vodafone champions DRM-free bundle

A little over 12 months after its Comes With Music service launched in the UK, Nokia is mute when it comes to just how many people actively use the bundled music offering. Comes With Music effectively requires a customer – be it a mobile user or network provider – to pay for over a year’s worth of unlimited music downloads at the point of purchase.

While much of the Comes With Music business model remains shrouded in mystery to market observers such as myself, it has clearly met with the approval of the major record labels, which have given Nokia access to almost the entirety of their music catalogs. Music-industry insiders suggest that the labels’ willingness to work with Nokia – and accept its undisclosed revenue-share deal – is motivated by a desire to break Apple’s stranglehold on the global digital market, since Apple is reputed to account for over 90% of global paid-for digital music downloads. But few mobile carrier groups have been convinced enough by the Comes With Music model to launch it.

Nokia made much of its rollouts in Australia, Brazil, Singapore and elsewhere in 2009 but has yet to offer quantitative evidence that Comes With Music has been a success, suggesting that its original marketing has been something of a botched job. One speaker at the MIDEM trade fair earlier this year even suggested that the “hidden music charge” – which is how money is made in the Comes With Music model – was the way forward for the music industry and that Nokia was sadly guilty of “cocking up” what is on paper a really good idea.

Nokia accepts that there had been some initial problems in getting operators to communicate the idea of Comes With Music effectively to subscribers and that there can be resistance from operators when Nokia attempts to intervene by showing them how best to sell the service to a customer. This is a little reminiscent of the “who owns the customer” debate, a frequent topic of discussion in analyst circles when Nokia first attempted to launch Ovi two-and-a-half years ago.

In contrast, Vodafone used the MIDEM conference to trumpet the success of its “all-you-can-eat subscription music service,” which enables users to download and keep 10 DRM-free MP3 tracks from the Vodafone music store for about €3 (US$4.19) a month. The carrier publicly announced that the service was now the biggest repeat paid-for music service in Europe, with 450,000 monthly subscribers in eight countries. This seems to have validated Vodafone Group’s decision to take Kevin Houghton from his far-flung New Zealand post to helm its global music offering. Houghton made such a success of Vodafone’s New Zealand music offering that it regularly featured on the list of the group’s 10 highest-grossing music stores. And now he appears to be producing similar results in Europe.

Vodafone’s announcement of such lofty figures only months after getting all of the major record labels on board will inspire the rest of Europe’s major carrier groups to follow its lead and adopt a similar model at a similar price point, dealing another blow to Comes With Music.

Will Comes With Music go the way of Nokia’s doomed premium N-Gage gaming platform? It’s hard to tell. In the meantime, Nokia has been touting its services strategy in emerging markets – Nokia’s CEO used his keynote speech at last month’s CES event to talk up the firm’s effort in that area – leading some to speculate that Ovi could become the iTunes of the developing world. Right now it seems unlikely, but 10 years ago who’d have thought that Apple would be in the position it’s in today?

Music & Copyright is a fortnightly research service published by Informa Telecoms & Media.

Ring tones and full-track downloads remain the world’s dominant mobile music services

The most prevalent mobile music services in the world are ring tones. According to the latest worldwide survey by Informa Telecoms & Media of Music & Copyright, ring tones accounted for nearly 38% of operator-deployed mobile music services, followed by full-track downloads, at just over 32%, and ring-back tones, at 26%.

Mobile services

For all the talk of a declining market, ring tones still have the highest per-download prices among all mobile-music products, averaging US$2.44 in their real-music format. Even polyphonic ring tones sell, on average, for slightly more than full tracks. Ring-back tones are the third-most-featured mobile music service on operator Web sites, accounting for just over a quarter of the services detected by the Informa survey. Ring-back tones are the second-cheapest, after monophonic ring tones, but that is only if seen from a purely “per download” perspective. Ring-back tones actually generate more revenue than any other, since download payments are rental payments that must be repeated at regular intervals to secure ownership of the tone. They also incur a monthly subscription charge.

Music & Copyright is a fortnightly research service published by Informa Telecoms & Media.