IDC Forecasts U.S. Wireless Music Market to Surge by 2009

IDC expects the "U.S. wireless full-track music downloads market segment -- a component of the overall wireless music market -- to surge to $1.2 billion in revenue" by 2009. This figure still represents less than 10 percent of the current overall music market, I believe.

IDC notes that "wireless full-track OTA delivery has yet to be launched in the U.S." and the following "have impeded development of this emerging market. Key near-term constraints include: lack of available handsets and 3G networks, digital rights management (DRM) complexity, competition from incumbent services, and business pricing models and practices."

They might want to add the reluctance of the network operators to offer handsets that allow users to circumvent the network (i.e.Motorola iTunes phone) as well. This combined with unrealistic pricing models (by carriers and labels alike) are the biggest deterrents at the moment. If consumers can downloada full song via iTunes for 99 cents, why should they pay ringtone-like prices to receive the same song OTA to their handset?

IDC analyst Lewis Ward makes a good point when he says the opportunity lies in providing extras beyond just the OTA full track downloads. "IDC believes that there is opportunity for wireless music services to include a range of bundled services designed to complement full tracks. Wireless devices and networks are emerging as a great new channel for the delivery of not just a la carte tracks, but subscription-oriented packages that include radio and song identification technologies, ring tones, ring back tones, music videos, concert information alerts and more," said Ward.

Like mobile gaming and video, OTA music download is also a nascent market so it'll be interesting to see how things pan out...

via Tekrati