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Mobile Music - Business Models to Increase Data ARPUs
Pyramid Research, Inc., Sep 2005, Pages: 30
With the emergence of Next Generation Networks, the mobile music industry is on the rise with the reality of Full Track Downloads (FTDs). This report analyzes two successful Full Track Download services already in operation; SK Telecom’s ‘MelOn’ and KDDI’s ‘Chaku-Uta Full’. This report examines where FTDs are now and the evolutionary path they will take by analyzing the business models, enabling technologies, stakeholders, and global developments that will drive industry growth. FTDs will be immensely popular and – if managed correctly – extremely profitable for providers.
We have identified two business models for accessing music downloads, based on the Korean and Japanese experiences. The Korean business model is a subscription-based access to music, and the Japanese business model is more of a traditional, unit-based purchase of songs.
Both models have had a positive impact on carrier performance. In Japan, KDDI’s 3G mobile data ARPU vaulted ahead of the competition’s 3G data ARPU after the launch of mobile music. In Korea, SK Telekom’s mobile data ARPU is 10 percentage points higher than that of its closest competitors.
This report provides an in-depth analysis of these two mobile music business models, their impact on mobile operator performance and whether they can ultimately be replicated elsewhere. We find that the key catalysts to successful mobile music models will be 3G+ wireless technologies, flat rate bandwidth pricing and extensive libraries. The best practices highlighted in this report also show that mobile music will be a key catalyst application in the roll-out of fixed mobile convergent services.
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