August 17, 2009

The Future Of Music On Cell Phones

by Sonal Gandhi

with Mark Mulligan, Thomas Husson, Erik Hood

Executive Summary (This is a document excerpt)

Uptake of music on phones in the US has been lackluster so far. Part of the reason is that mobile and music providers have focused on their business models first and the user experience second. Europe and Asia have fared better in terms of user adoption, but direct revenues from mobile music remain lean. Listening to music will eventually converge on the phone, albeit slowly — and music on phones will be about playback and discovery, not purchase. Some music services will evolve to extend the PC-based music experience to customers, while others will exploit mobile's unique strengths as an always-connected, always-carried, highly personal communications device. To benefit from mobile music adoption, music labels need to shift their strategy from direct to indirect revenue gains, services need to become platform-agnostic, and device makers and carriers need to up the ante on innovative offerings.

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