DIGITAL MUSIC AND MOBILE HANDSETS
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1 DIGITAL MUSIC AND MOBILE HANDSETS INDEX Index Table of Contents Executive summary Overview of the European music industry The European music market International music labels Universal Music Group Sony BMG Music Entertainment EMI Group Warner Music International Other independent music labels Digital music distribution Novel digital music formats More complex marketing New digital delivery channels Business models for digital music distribution Digital music and handsets Digital audio formats Uncompressed digital audio Lossless compressed digital audio Lossy compressed digital audio Digital rights management (DRM) OMA DRM Proprietary mobile DRM solutions Apple FairPlay Microsoft Windows Media DRM and PlayReady Billing Communication Synchronisation...29 STRATEGIC VAS RESEARCH SERIES i
2 INDEX DIGITAL MUSIC AND MOBILE HANDSETS Downloading Streaming Music-enabled handsets Mobile music value chain Mobile music services Handset manufacturers Nokia Motorola Samsung Sony Ericsson LG Apple Telecom vendors Alcatel-Lucent Ericsson Nokia Siemens Networks European mobile operators Vodafone Orange T-Mobile Telefónica Group Group Scandinavian mobile operators Content and service providers Introduction European mobile content and service providers Aspiro Buongiorno EMDO Groove Mobile Jamba Musiwave...67 ii STRATEGIC RESEARCH SERIES VAS RESEARCH SERIES
3 DIGITAL MUSIC AND MOBILE HANDSETS INDEX Omnifone European online digital music service providers Industry analysis and market forecasts Music industry analysis Suppliers Industry barriers and substitutions Buyers Degree of rivalry Evaluation of digital music business models Subscription based services Downloading services Converged digital music market forecast Digital music retail revenues Geographical market forecasts Revenue distribution Impacts on the mobile industry Demand for music enabled handsets Demand for mobile Internet connectivity services Exclusive music services and customer loyalty promotion...83 Glossary...85 STRATEGIC VAS RESEARCH SERIES iii
4 INDEX DIGITAL MUSIC AND MOBILE HANDSETS Index List of Figures Figure 1.1: Music market retail value distribution (Europe 2006)...4 Figure 1.2: Digital music sales by format (Europe H1-2006)...5 Figure 1.3: Music market retail value million (EU )...6 Figure 1.4: Music labels revenue streams...7 Figure 1.5: International music label revenues and market shares...8 Figure 1.6: Digital music distribution chain...11 Figure 1.7: Traditional and contemporary music launch process...13 Figure 1.8: Worldwide trade revenue by format (US$ million)...14 Figure 1.9: Digital music business models...16 Figure 2.1: Mobile music delivery process...17 Figure 2.2: Digital Audio Formats...19 Figure 2.3: Example of OMA DRM Deployment...23 Figure 2.4: OMA DRM 2.0 compliant handsets (April 2007)...24 Figure 2.5: Music transfer from PC to mobile handset...29 Figure 2.6: Music Download to mobile handset...30 Figure 2.7: Comparison of portable music players and music-enabled handsets...32 Figure 2.8: Mobile music value chain...34 Figure 3.1: Handset manufacturer shipments and market shares (Worldwide 2006)...37 Figure 3.2: Nokia music handset range (April 2007)...39 Figure 3.3: Samsung music handset range (April 2007)...41 Figure 3.4: Sony Ericsson music handset range (April 2007)...42 Figure 3.5: LG music handset range (April 2007)...44 Figure 3.6: Top five mobile operator groups (EU27+2 December 2006)...49 Figure 3.7: Vodafone music service pricing (April 2007)...50 Figure 3.8: Orange music service pricing (April 2007)...52 Figure 3.9: T-Mobile music service pricing (April 2007)...53 Figure 3.10: Telefónica Group music service pricing (April 2007)...55 Figure 3.11: 3 music service pricing (April 2007)...57 iv STRATEGIC RESEARCH SERIES VAS RESEARCH SERIES
5 DIGITAL MUSIC AND MOBILE HANDSETS INDEX Figure 4.1: Content service providers...62 Figure 4.2: European mobile music content and service providers...63 Figure 4.3: European online music service providers...70 Figure 5.1: Digital music retail revenues (EU )...77 Figure 5.2: Digital and physical format music retail revenue split (EU )...78 Figure 5.3: Forecasted digital music retail revenues (EU )...79 Figure 5.4: Distribution of digital music revenues (EU )...81 Figure 5.5: Music enabled handset shipments (EU )...82 STRATEGIC VAS RESEARCH SERIES v
6 INDEX DIGITAL MUSIC AND MOBILE HANDSETS vi STRATEGIC RESEARCH SERIES VAS RESEARCH SERIES
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