Grooves On The Move

Ready or not, here comes the audio download future—and a sizable portion of it may be wireless (think cellphones). Or at least that's what IDC is predicting in a new study called "US Wireless Music 2005-2009 Forecast and Analysis: Grooves on The Move."

IDC's Susan Kevorkian gets right to the point: "We believe that online and wireless music services may represent the music industry's best long-term prospects for reversing decline and promoting growth, and that these new services will ultimately be the future of recorded music distribution."

Although music downloads are only one component of the overall wireless music market (ring tones are another), IDC argues that wireless downloads present one of the largest opportunities in the wireless data industry. IDC says it expects the US wireless music market alone to surge to $1.2 billion in revenue and over 50 million customers and subscribers by 2009.

IDC notes that the domestic market for cellular OTA (over-the-air) delivery of music via 2.5G and 3G networks is clearly still in its infancy, despite the increasing levels of media coverage and industry buzz around the topic. "Indeed, wireless full-track OTA delivery has yet to be launched in the US. A number of challenges facing the wireless music value chain have impeded development of this emerging market."

While the researchers see the success of wireless downloads as inevitable, they point out that several things are holding this potential market back: lack of available handsets and 3G networks, digital rights management (DRM) complexity, competition from incumbent services, and business pricing models and practices.

If these problems can be sorted out, IDC also believes that there is opportunity for wireless music services to include a range of bundled services designed to complement full tracks, and to deliver music to consumers however and whenever they want it. IDC's Lewis Ward explains, "Wireless devices and networks are emerging as a great new channel for the delivery of not just à la carte tracks, but subscription-oriented packages that include radio and song identification technologies, ring tones, ring-back tones, music videos, concert information alerts, and more."

Sounds wonderful for the music biz, but is the public really ready to download iTunes via a cellphone? IDC says it is currently developing a separate survey to gauge US consumer awareness of and interest in cellular delivery of music. Results from this survey are expected later this year.

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