The mobile music industry was worth $14.4 billion last year with revenue coming from ringtone, ringback tone, full track download, and music streaming purchases, according to MIDEM.
Ringtones and ringback tones accounted for $9.7 billion of total revenue, while full track downloads accounted for $3.4 billion and music streaming totaled $1.4 billion of total revenue; however, Informa Telecoms & Media predicts that full track downloads will see the strongest growth over the coming years. By 2014, mobile music revenue will total $25.3 billion, with the largest percentage of revenue coming from full track downloads.
Figure 1: Data courtesy of Informa Telecoms & Media
The Mobile Music App Market
“The biggest blow [to traditional mobile music providers] has been the new world order ushered in by the rise of smartphone apps and the “over the top” players from the online and computer worlds…It is these mobile outsiders that now dominate the mobile content scene.” – MIDEM
The number of music apps in the mobile market is growing. In two years, the Apple App Store saw an increase of 270% in the number of music apps, from 496 apps in January 2009 to 13,912 apps in January 2010. And it’s not just the number of music apps that has been increasing- the number of smartphone users who download music apps is growing as well.
Why the popularity of music apps is growing
What separates music apps from traditional mobile music providers is content interaction. Users can immediately download music apps, and then stream and even download full tracks straight to their smartphones. Music apps that feature artists allow fans to interact with their favorite musicians and other fans on a more intimate level, encouraging a sense of community.
What’s cooler for a Katy Perry fan than to talk with other KatyCats and receive updates from Katy Perry herself, all while listening to “Last Friday Night (T.G.I.F.)?
The value in music apps
In 2010, mobile apps alone generated $4 billion in revenue. Music apps in the leading app stores- Apple App Store and Android Market- on average, accounted for 3.9% of total apps by January 2011. And not just music fans are seeing the value in downloading mobile apps; record labels see “the value of [creating] mobile applications as a means of encouraging music fans to interact with their artists”.