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 MUSIC ALLY

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Can apps come to the rescue of a mobile music scene losing interest in ringtones and disenchanted with full-track downloads? Music Ally’s Nik Miscov thinks so...

music app round a decade ago the ringtone emerged to define the first age of mobile music. It was nice while it lasted, but the market is in decline. Unfortunately, the fulltrack download, which many hoped would fill the void left by ringtone, has failed to take up the slack. Without doubt, mobile music has not flourished as expected and the last few years have been disappointing. At Music Ally, we compiled a report that analysed mobile music trends in 14 key markets across Europe, USA, Asia, and Latin America. Based on the assumption that over the next three years these trends would persist (Europe declining by 6.4 per cent, US by 9.8 per cent, and Latin America growing by 7.9 per cent), we predict the global mobile income derived by labels will decline in 2011 by 11.4 per cent. That equals a slide of $164 million from $1,439.5 million in 2008 to $1,274.9 million in 2012. On the face of it, that’s alarming. However our research suggests a silver lining in the form of mobile apps. We believe they can offset the decline in traditional mobile music formats and start a third wave of growth following the SMS and then the ringtone booms of the last decade. In saturated western markets, the explosion of apps and smartphones has massive potential to grow mainstream mobile content industries. In the last year, we’ve seen an encouraging wave of innovation in the music apps space, with some products directly monetising music through streaming and gaming, and others fuelling sales of online and ‘real world’ products. Here are a few examples:

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Rekords This app, made by Japanese music label Delaware, uses a virtual vinyl record user interface to stream songs. Users can switch the ‘disc’ from side A to B by flipping their iPhone. 12

November 2009

Music Ally’s Nik Miscov (top right), rock band Presidents of the United States of America (bottom right) and a shopper streaming music

nuTsie This service lets users listen to playlists from their iTunes libraries, but also builds its own recommended lists of best tracks from specific genres. Tap Tap No doubt the most successful of all iPhone apps. It lets users buy and tap along to a selection of songs. With version three just launched, there are 50 paid bundles of music inside the game costing $2.99 per six-pack. Artists such as Blink 182, Fall Out Boy and Foo Fighters are signed up. iLike Like Tap Tap, iLike has succeeded in establishing itself as a significant

brand. It’s a social media app that lets people share their music tastes. On mobile it has complemented its core service with the Local Concerts app, which lists upcoming shows in a user’s area and provides links to buy tickets. It’s a fine example of an app that aids ‘real world’ music sales. Streamed albums Dave Dederer, singer with The Presidents of the United States of America, is now a VP at Melodeo (which makes nuTsie) where he has launched a three dollar app for iPhone containing the four Presidents albums and exclusive material. It’s being watched as a possible new format for the future.

Spotify No introduction needed. Spotify sees mobile as key to growing its premium subscription play. So what’s the potential impact of apps? Based on modest assumptions, we project 69 million music app users will generate a monthly ARPU of $1.20 by 2011. This could help labels rake in $630 million. It’s encouraging, and we’re confident that apps can reverse the decline in ‘traditional’ mobile music formats in the West, while accelerating growth in developing markets. For details of the Music Ally report please phone +44 (0) 207 420 4320 or email anthony@musically.com

www.mobile-ent.biz

Mobile Entertainment Issue 57, November 2009  

For everyone in mobile content