Mobile Music is More Attractive with Subscription-based Models

The potential for mobile music is more attractive with subscription-based models: we estimate that the global market for “a la carte” mobile music would be worth around $US2.5bn to MNOs in 2011; with subscription models, mobile music market potential swells to over US$4bn in 2011 (not including ringtones, etc.).

With a US$1.99 weekly revenue derived from subscription services (US$103.48 annually) and uptake of subscription services starting in 2007 at a rate of 1% of 3G subscribers (rising to 2.8% by 2011), subscription services would bring in an additional US$1.64bn for MNOs globally by 2011. The total forecast revenues for combined “a la carte” and subscription mobile music services would be worth just over US$4bn in 2011.

Exhibit: Forecast Global “a la carte” and Subscription Mobile Music Revenues, 2006-2011 (US$m)

Source: Pyramid Research estimates.