Making Mobile Music Work will be a Hard Task says Pyramid Research

Business Wire, Sept 14, 2005

CAMBRIDGE, Mass. -- The large number of stakeholders in the mobile music value chain is the key obstacle in developing a workable business model. "The addition of mobile operators to the downloadable music value-chain adds a layer of complexity; operators have to be able to successfully navigate this environment or they stand to lose out completely," comments Pyramid Research senior analyst Nick Holland, author of the new report "Get on Track with Mobile Music: Exploring Mobile Music Best Practices" (www.pyramidresearch.com/store/rpmobmus.htm?SC=PRmm). E[acute accent]While mobile music presents one of the greatest mobile market opportunities, operators must reach win-win agreements with publishers and vendors to provide 'over-the-air' downloads or they will miss the opportunity to boost data ARPUs. E[acute accent]"Mobile carriers will wield all their power to become a key part of the value chain. Their main leverage is handset subsidization, but that's a vulnerable leverage as handset manufacturers will increasingly partner with publishers like iTunes, Napster and Real Rhapsody, cutting operators out of the loop" adds Holland. Once converged portable music player/mobile phone handsets have sufficient storage and functionality to replace both devices at a comparable price the subsidization threat will decrease. E[acute accent]Holland concludes, "There are too many parties in the mobile music value chain all vying for a slice of US$1 per downloaded song." Operators may be the first to be excluded from the value chain, but as networks increase in sophistication, operators can push 'over-the-air' downloads to increase data ARPUs, but must be able to price downloads at a slight premium to the psychological barrier of US$1 per download set by Apple's iTunes.

E[acute accent]About "Get on Track with Mobile Music: Exploring Mobile Music Best Practices"

E[acute accent]This report emphasizes that mobile music can be offered successfully, outlining key prerequisites to success, including business models, enabling technologies, stakeholders, and global developments. View report details www.pyramidresearch.com/store/rpmobmus.htm?SC=PRmm.

E[acute accent]About Pyramid Research

E[acute accent]Founded in 1986, Pyramid provides research and consulting services to the communications, media and technology industry in over 100 countries - helping clients to go beyond existing boundaries by tracking and exploiting business opportunities worldwide. For more information, visit www.pyramidresearch.com.