eMarketer looks at some factors marketers will face in their campaigns to sell mobile music.
Two large, global industries will begin demanding extensive campaigns centered around mobile music this year: the music industry and wireless service providers. For both, the business of selling music directly onto mobile phones is something of a lifeline.
The most pressing question facing mobile carriers, music labels and music service providers is how consumer behavior will evolve as mobile music transitions from a phase dominated by early-adopter, active music fans to one more influenced by mainstream, casual music fans. Understanding this shift will be decisive for anticipating necessary changes in service definitions, price points, bundling with other services and all the other aspects of a mature service category. Marketers would do well to experiment during 2006-2007 to anticipate how to best position their efforts as mobile music matures even further.
A good starting point for understanding behavioral trends is to understand where music fits in the overall consumption habits of people, especially those who buy online. A quick look at ecommerce in the U.S. -- the largest and best-documented digital music market -- reveals that music/video content rank in the middle of the growth rates of various categories such as apparel, home products, consumer electronics, jewelry/luxury goods and books. This does not mean that music is bigger or smaller as a market, but that the growth rate for buying music online, which is by far the dominant means for accessing mobile music, is in competition for other categories for a share of discretionary income.
Furthermore, the overall purchase patterns for U.S. ecommerce shoppers indicate that the population of online music purchasers has not increased dramatically over the past two years. A survey of online purchase habits conducted by WSL Strategic Retail and ClickZ near the end of 2005 revealed only a two percent increase in music or DVD purchases between 2003 and 2005. At the same time, other categories such as office supplies, clothes, jewelry, entertainment tickets and even pharmaceutical prescriptions realized near-double-digit growth rates during the same period.
Another aspect to keep in mind is that digital or mobile music technology exists in the form of dedicated music players, mobile phones, DVD players, stereos, automotive audio systems, high-definition and other digital televisions, and other clients in most advanced countries. The sheer variety of ways that digital music can be packaged and played on different fixed or mobile devices lends credence to the idea that mobile music will not likely be permanently fixed to a specific device. A study by the Gallup Organization in December 2005 looked at the increased number of consumer electronics that inserted themselves in people's lives as they went up the income scale.
By no means does this suggest that households earning less than $30,000 have less digital music to access. Instead, it shows how mobile carriers and record labels must think about selling or sponsoring music depending on the income level they are targeting.
While the US music market displays a bias toward a multidevice future for experiencing music, the rest of the world differs according to geography and economic development regarding how it will experience digital music. A TNS survey conducted in late 2005 contains no surprises that Korea and Hong Kong top the list of countries for preferred listening to mobile phones. However, coming in at third and fourth place are Brazil and Russia, whose metropolitan markets contain a substantial number of mobile music fans. The Chinese juggernaut rolls on with 12% (of 400 million) of mobile subscribers stating they regularly listen to music on their mobile handset.
Certainly, there remains ample room to grow the mobile music opportunity by volume. Just as certainly, marketers and advertisers around the world will be tasked with driving this growth and doing so quickly.
John Gauntt is a senior analyst at eMarketer. This article is drawn from the new eMarketer report Mobile Music: A New Marketing Challenge.