For mobile operators around the world, music is seen as a key battleground. In the UK, for example, carriers use music as a way to offer their customers things they can’t get on other networks. For Vodafone, it’s exclusive access to gigs by top bands. For O2, VIP access to some of the facilities at the O2 concert arena in London.
And there are plenty of music download services to choose from, provided by network operators, handset makers, such as Nokia and Sony Ericsson, and independent companies like Omnifone.
Similarly, in Asia, mobile music is booming. According to the analyst Screen Digest, the Asia-Pacific region accounted for almost 55 per cent of global mobile music revenues in 2007. In Japan and Korea, over 90 per cent of digital music revenues are mobile.
In the Asia-Pacific region as a whole, there were 39.7 million mobile music subscriptions in 2007, a third of which were to full-track music services, and Screen Digest says it expects this figure to rise by 30 per cent by the end of 2008, as emerging markets begin to offer more competitive services and more advanced handsets. With full-track music download services set to take off in India and China when 3G networks launch there during 2009, it predicts that mobile music revenues in the region will more than double to reach over 1.8 billion over the next five years.
Subscription
Subscription is the dominant business model in Asia. In Hong Kong, for example, 3Musicstation offers 3 Hong Kong customers unlimited mobile song downloads from a catalogue drawn from major record labels and independents for HK$12 (US$1.54) per week, including data charges. In September, Vodafone Australia launched a similar service, offering its customers unlimited access to a catalogue of over a million tracks for a flat fee of AU$2.75 (US$1.82)per week, with no download fees.
Screen Digest mobile music analyst Christine Binns says this situation seems set to continue, with any move towards an advertising-funded model looking unlikely: “Advertising and the interruption caused by the advertising could drive users away from over the air downloads to online services where advertising may not seem as intrusive given the larger screen. In light of the strong success of mobile music in the region, it would seem unlikely that operators and other service providers would look to other models, such as ad funding, and risk what is already a strong business.”
RBT
One of the most popular forms of mobile music download in Asia is the ring-back-tone (RBT), in which a mobile subscriber pays for a favourite song to be played to a caller while the caller is waiting for them to answer their mobile phone.
According to Milind Pathak, country head, Buongiorno Hong Kong, India branch office, consumers in India typically pay a subscription fee of around 30 rupees (US$0.61) per month, and then pay an additional 10 to 15 rupees for each new song they wish to download as a RBT.
Pathank estimates that around 35 per cent of Indian mobile subscribers have an RBT subscription, with penetration even higher in some Asian countries such as South Korea, where the figure is between 50 and 60 per cent. One of the reasons for RBTs popularity in Asia is the aggressive and innovative way in which they have been marketed, says Pathak, citing one campaign which ran in India in which a mobile user could download a song to their phone as an RBT simply by pressing the Star key on the phone when they heard the song as an RBT when calling a friend. “Operators in Europe see RBT as a technical functionality, whereas in Asia, they have recognised the marketing opportunity,’ says Pathank. “China Mobile, for example, has 500 people engaged in the production and marketing of RBTs.”
Piracy
But while the mobile music market in Asia may appear to be in rude health, it is not without its problems. In June this year, the Mobile Entertainment Forum released a report on mobile entertainment in India, which concluded that piracy was having “a devastating impact” on the ringtone market in the country. The report also said that piracy was expected to continue to have a huge impace, with revenues forecast to continue to decline over the forecast period.
“Paying for music downloads is just not a common practice,” says Jason Kuperman, vice-president, Asia-Pacific digital development at Omnicom. “People are just not used to paying for the stuff, or for the data usage for downloading songs. They download them to their PC and then port them to the phone.”
Andrew Fisher, CEO of mobile music discovery service Shazam, believes one solution could lie in offering consumers value-added content. In this scenario, the song would be offered free, with consumers encouraged to pay for the additional content.
“The challenge here would be to identify what types of features and services you could bundle with the song that the consumer would consider were worth paying for if they were getting the song for free,” says Fisher.
Frederique Covington, regional executive planning director at Bates 141 in Singapore, feels that mobile music providers are missing a trick by focusing their attention almost exclusively on popular western artists.
In Bates’s experience, says Covington, Asian consumers have stopped looking so much to the West, and are taking a much closer interests in acts closer to home. “If they spent a little bit more money helping with the discovery of local artists, they might be able to tap into this market at a much lower cost,” she says. “There’s this unique opportunity, and virtually no-one is doing it.”
Nokia
With the exception, perhaps of Nokia. In October 2007, with Bates’s help, it launched the Nokia Independent Artists Club (IAC) in Singapore and Indonesia, and has since expanded its footprint to cover Malaysia, the Philippines, Thailand, Bangladesh and Vietnam.For the bands, the IAC is a showcase for new musical talent in the region. For music fans, it’s a place where mobile users can download five free tracks per month, increasing to 10 for Nokia handset owners.
With its Ovi and Nokia Comes with Music services, in addition to the IAC, Nokia is clearly setting its stall out to be in the vanguard of the mobile music scene. With Apple, Google, other handset makers such as Sony Ericsson, and individual network operators, all using music as a way of capturing Asian consumers’ attention, these are exciting times for the mobile music industry in the region.
And there are plenty of music download services to choose from, provided by network operators, handset makers, such as Nokia and Sony Ericsson, and independent companies like Omnifone.
Similarly, in Asia, mobile music is booming. According to the analyst Screen Digest, the Asia-Pacific region accounted for almost 55 per cent of global mobile music revenues in 2007. In Japan and Korea, over 90 per cent of digital music revenues are mobile.
In the Asia-Pacific region as a whole, there were 39.7 million mobile music subscriptions in 2007, a third of which were to full-track music services, and Screen Digest says it expects this figure to rise by 30 per cent by the end of 2008, as emerging markets begin to offer more competitive services and more advanced handsets. With full-track music download services set to take off in India and China when 3G networks launch there during 2009, it predicts that mobile music revenues in the region will more than double to reach over 1.8 billion over the next five years.
Subscription
Subscription is the dominant business model in Asia. In Hong Kong, for example, 3Musicstation offers 3 Hong Kong customers unlimited mobile song downloads from a catalogue drawn from major record labels and independents for HK$12 (US$1.54) per week, including data charges. In September, Vodafone Australia launched a similar service, offering its customers unlimited access to a catalogue of over a million tracks for a flat fee of AU$2.75 (US$1.82)per week, with no download fees.
Screen Digest mobile music analyst Christine Binns says this situation seems set to continue, with any move towards an advertising-funded model looking unlikely: “Advertising and the interruption caused by the advertising could drive users away from over the air downloads to online services where advertising may not seem as intrusive given the larger screen. In light of the strong success of mobile music in the region, it would seem unlikely that operators and other service providers would look to other models, such as ad funding, and risk what is already a strong business.”
RBT
One of the most popular forms of mobile music download in Asia is the ring-back-tone (RBT), in which a mobile subscriber pays for a favourite song to be played to a caller while the caller is waiting for them to answer their mobile phone.
According to Milind Pathak, country head, Buongiorno Hong Kong, India branch office, consumers in India typically pay a subscription fee of around 30 rupees (US$0.61) per month, and then pay an additional 10 to 15 rupees for each new song they wish to download as a RBT.
Pathank estimates that around 35 per cent of Indian mobile subscribers have an RBT subscription, with penetration even higher in some Asian countries such as South Korea, where the figure is between 50 and 60 per cent. One of the reasons for RBTs popularity in Asia is the aggressive and innovative way in which they have been marketed, says Pathak, citing one campaign which ran in India in which a mobile user could download a song to their phone as an RBT simply by pressing the Star key on the phone when they heard the song as an RBT when calling a friend. “Operators in Europe see RBT as a technical functionality, whereas in Asia, they have recognised the marketing opportunity,’ says Pathank. “China Mobile, for example, has 500 people engaged in the production and marketing of RBTs.”
Piracy
But while the mobile music market in Asia may appear to be in rude health, it is not without its problems. In June this year, the Mobile Entertainment Forum released a report on mobile entertainment in India, which concluded that piracy was having “a devastating impact” on the ringtone market in the country. The report also said that piracy was expected to continue to have a huge impace, with revenues forecast to continue to decline over the forecast period.
“Paying for music downloads is just not a common practice,” says Jason Kuperman, vice-president, Asia-Pacific digital development at Omnicom. “People are just not used to paying for the stuff, or for the data usage for downloading songs. They download them to their PC and then port them to the phone.”
Andrew Fisher, CEO of mobile music discovery service Shazam, believes one solution could lie in offering consumers value-added content. In this scenario, the song would be offered free, with consumers encouraged to pay for the additional content.
“The challenge here would be to identify what types of features and services you could bundle with the song that the consumer would consider were worth paying for if they were getting the song for free,” says Fisher.
Frederique Covington, regional executive planning director at Bates 141 in Singapore, feels that mobile music providers are missing a trick by focusing their attention almost exclusively on popular western artists.
In Bates’s experience, says Covington, Asian consumers have stopped looking so much to the West, and are taking a much closer interests in acts closer to home. “If they spent a little bit more money helping with the discovery of local artists, they might be able to tap into this market at a much lower cost,” she says. “There’s this unique opportunity, and virtually no-one is doing it.”
Nokia
With the exception, perhaps of Nokia. In October 2007, with Bates’s help, it launched the Nokia Independent Artists Club (IAC) in Singapore and Indonesia, and has since expanded its footprint to cover Malaysia, the Philippines, Thailand, Bangladesh and Vietnam.For the bands, the IAC is a showcase for new musical talent in the region. For music fans, it’s a place where mobile users can download five free tracks per month, increasing to 10 for Nokia handset owners.
With its Ovi and Nokia Comes with Music services, in addition to the IAC, Nokia is clearly setting its stall out to be in the vanguard of the mobile music scene. With Apple, Google, other handset makers such as Sony Ericsson, and individual network operators, all using music as a way of capturing Asian consumers’ attention, these are exciting times for the mobile music industry in the region.
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