NPD: Mobile Music: Who's Listening?

The NPD Group has issued a new report that explores consumer demand for mobile music based on a survey of more than 8,200 teens and adults. The report entitled, Mobile Music: Who's Listening? found that the convergence of digital music and mobile phones is likely to develop at a steady pace.

Clint Wheelock at NPD said, "Mobile music is poised to be the breakout content category of 2006. With a major emphasis and heavy promotion by wireless carriers, device manufacturers, and the music industry itself, you can bet that consumers will be hearing a lot about new music services, and NPD's research indicates that many of them are ready to listen."

According to the report:

• 20 percent of all consumers are interested in purchasing an MP3-capable phone
• 56 percent of teens are interested in such a phone
• Three quarters of these intenders are willing to pay a premium for MP3 phones, an average of $25 extra
• According to NPD's price sensitivity analysis, the optimal price point for mobile music downloads is $1.75, compared to the typical $.99 in the PC digital music domain.
• 75 percent say they anticipate phones being able to handle 100 songs or fewer
• More than half claimed they'd prefer to synchronize their phone with their PC
• 37 percent prefer the option of downloading music OTA
• 21 percent are interested in purchasing a phone that gave them access to either Sirius or XM Satellite Radio services
• Since last year, the number of ringtone purchasers has nearly doubled, from nine to 17 percent, with another 12 percent expressing an interest in purchasing ringtones within the next year.

Russ Crupnick at NPD said, "More and more consumers are migrating their music libraries to their PCs. It's a simple process to download tracks directly to the desktop from the Web; then synch the entire music list with existing home audio systems and portable MP3 players - including MP3-enabled mobile phones."

Another potential market is ringback tones. The survey found that "among wireless subscribers, 25 percent say this service that has piqued their interest - even more than MP3 phones." It's also appealing to record labels and service providers, because ringback tones reside on the network and involve far fewer Digital Rights Management (DRM) issues.