Pyramid: Making Mobile Music Work Will Be a Hard Task

Pyramid Research has issued a new report, "Get on Track with Mobile Music: Exploring Mobile Music Best Practices," that found a "large number of stakeholders in the mobile music value chain is the key obstacle in developing a workable business model."

Nick Holland at Pyramid Research said, "The addition of mobile operators to the downloadable music value-chain adds a layer of complexity; operators have to be able to successfully navigate this environment or they stand to lose out completely."

"Mobile carriers will wield all their power to become a key part of the value chain. Their main leverage is handset subsidization, but that’s a vulnerable leverage as handset manufacturers will increasingly partner with publishers like iTunes, Napster and Real Rhapsody, cutting operators out of the loop" adds Holland.

Holland concluded, "There are too many parties in the mobile music value chain all vying for a slice of US$1 per downloaded song." Pyramid beleives there is an opportunity for network operators to "push ‘over-the-air’ downloads to increase data ARPUs," but pricing will have to be set at "slight premium to the psychological barrier of US $1 per download set by Apple’s iTunes."