1) The document discusses how mobile music has declined in recent years as interest in ringtones has waned and full track downloads have failed to replace them. 2) It analyzes mobile music trends in major markets and predicts global mobile music revenues will decline 11.4% by 2012. 3) However, it argues that music apps have the potential to offset this decline and spark new growth, pointing to examples like Spotify, Tap Tap, iLike, and streamed albums that are fueling sales and subscriptions.

1. I MUSIC ALLY
Turn the 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
A ringtone emerged to define the
first age of mobile music. It
was nice while it lasted, but the market
is in decline. Unfortunately, the full-
track 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 Music Ally’s Nik Miscov (top right), rock band Presidents of the United States of America (bottom right) and a shopper streaming music
growth following the SMS and then
the ringtone booms of the last decade. nuTsie brand. It’s a social media app that lets Spotify
In saturated western markets, the This service lets users listen to people share their music tastes. On No introduction needed. Spotify sees
explosion of apps and smartphones playlists from their iTunes libraries, but mobile it has complemented its core mobile as key to growing its premium
has massive potential to grow also builds its own recommended lists service with the Local Concerts app, subscription play.
mainstream mobile content industries. of best tracks from specific genres. which lists upcoming shows in a
In the last year, we’ve seen an user’s area and provides links to buy So what’s the potential impact of apps?
encouraging wave of innovation in the Tap Tap tickets. It’s a fine example of an app Based on modest assumptions, we
music apps space, with some products No doubt the most successful of all that aids ‘real world’ music sales. project 69 million music app users will
directly monetising music through iPhone apps. It lets users buy and tap generate a monthly ARPU of $1.20 by
streaming and gaming, and others along to a selection of songs. With Streamed albums 2011. This could help labels rake in
fuelling sales of online and ‘real world’ version three just launched, there are Dave Dederer, singer with The $630 million. It’s encouraging, and
products. Here are a few examples: 50 paid bundles of music inside the Presidents of the United States of we’re confident that apps can reverse
game costing $2.99 per six-pack. America, is now a VP at Melodeo the decline in ‘traditional’ mobile music
Rekords Artists such as Blink 182, Fall Out (which makes nuTsie) where he has formats in the West, while accelerating
This app, made by Japanese music Boy and Foo Fighters are signed up. launched a three dollar app for growth in developing markets.
label Delaware, uses a virtual vinyl iPhone containing the four Presidents
record user interface to stream songs. albums and exclusive material. It’s For details of the Music Ally report
iLike
please phone +44 (0) 207 420 4320
Users can switch the ‘disc’ from side Like Tap Tap, iLike has succeeded in being watched as a possible new
or email anthony@musically.com
A to B by flipping their iPhone. establishing itself as a significant format for the future.
12 November 2009 www.mobile-ent.biz