Author: Caitlin Douglass

State of the Mobile Music Industry

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Bonnie and Clyde Freestyle picture copyright of Tricia Gosingtian and Dae Lee

It’s no secret that a slow response to the digital age has caused serious problems for the music industry in recent years. Sales have been in decline and most experts see no reason for that trend to slow. However, GigaOM recently covered a Juniper Research report in which mobile music had, “a larger piece of a shrinking pie.” Juniper identified mobile music as the bright spot in an otherwise dismal forecast for the music industry as a whole. Already a multi-billion dollar industry, mobile music is likely to grow at a substantial rate in the coming years as the technology that supports streaming and mobile downloads becomes more affordable and available.

Those of us who can’t live without our BlackBerry can’t help but notice that we are part of a growing community. BlackBerry manufacturer RIM reports that they shipped 7.8 million BlackBerry handsets between December 2008 and February 2009, bypassing Apples as the leading supplier of smartphones. As carrier deals, falling prices, and aggressive marketing have placed smartphone technology at virtually everyone’s fingertips, the expansion of 3G networks insures the reliability of the investment. Over the past year, carriers such as AT&T, Alltel, and T-Mobile greatly expanded their 3G networks and set the stage for the expansion of mobile music. Smartphone users accustomed to Internet music options have found themselves unshackled from their PC and application developers are seeking to meet their mobile needs.

Slacker.com’s radio app for BlackBerry allows users to listen to over 100 expert programmed radio stations or create a personalized station of their own. In addition to free streaming music, the application provides artist bios and album reviews as well. Best of all, Slacker’s app allows you to cache stations to your SD card for listening even when network reception intermittent. In March, the popular internet radio application Pandora released a BlackBerry version of the popular service. Just like Pandora for your computer, the Pandora for BlackBerry application allows you to create personal radio stations based on music preferences and uses its music genome data to feed you songs you might like as well. In addition to free streaming radio, the increased speed and storage capacity of smartphones has increased the number of mobile full-song downloads. Such downloads have undoubtedly contributed to the transfer of music sales profits to the mobile arena.

Perhaps the music industry’s best chance for an increase in overall revenue through the growth of mobile music can be found in ringtone and ringback sales. Unlike full-song mobile downloads, ringtones and ringback might complement traditional sales instead of replacing them.

Companies like SendMe Mobile and Mobicious have been getting an increasing amount of funding over the past two years. SendMe launched SoLow, an online sweepstakes site in July 2007 and acquired the online mobile community mbuzzy in October 2007. In 2008 SendMe Mobile expanding their ringtones catalog through licensing deals with Universal Music Group and Warner Music Group. Both deals provided SendMe members with ringtone access to songs owned by both companies. Investors like the looks of the ringtone/ringback market and in March of this year SendMe announced the acquisition of an additional $12 million in growth capital financing.

The Massachusetts based startup Mobicious is also tapping into the ringtone and ringback market but has ambitions to become something larger. Mobicious allows users to create a ringtone by uploading an mp3 from their desktop and download a 20 second clip as a ringtone to their smartphone. Mobicious also caught the attention of venture capitalists to the tune of $5 million in funding and in 2008 was honored as one of the most innovative companies in the Northeast. Mobicious has set out to become the go-to portal for mobile content, and in addition to ringtones they provide over 400,000 items of free and premium content.

The music industry will undoubtedly continue the attempt to adjust to the digital and increasingly mobile world, and smartphone users can expect innovative applications designed to deliver the music they want, when and anywhere they want it.

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