RCR Wireless: Mobile Music Market Faces Many Challenges

iTunes7_movie.jpgThe worldwide mobile music market will more than double in the next few years, exploding from $13.7 billion this year to more than $32 billion by 2010, according to a Gartner study and reported by RCR Wireless News.

“But splitting up all that cash won’t be easy,” the report said. “While boilerplate agreements don’t exist in the world of ringtones, music labels generally get about 50% of revenues from the music clips, and carriers demand roughly 40%. The remaining 10% goes to the distributor-as does the responsibility of making sure everybody else in the value chain gets a taste.”

Due to all the complicated agreements between artists, carriers, and distributors, plus billing snafus that let about 30% of ringtone and other purchases go through for free, the revenue model for mobile music is getting more complicated as times goes on, not less, according to the article. Plus, the market still hasn’t decided if there’s enough demand for wireless music downloads.

“Some believe the case has yet to be made for a viable, full-track mobile music service,” said the RCR Wireless News report. “Apple’s iTunes has effectively set the bar at 99 cents per song-a price point carriers may not be able to match-and the vast majority of users thus far have been unwilling to pay a premium for over-the-air music downloads. But if mobile and its music partners can spread the wealth throughout the value chain-and then market the stuff effectively-mobile music may finally gain mass-market traction.”

Tuning Out [RCR Wireless News]