Music & videos top mobile entertainment

MUMBAI: The Asia-Pacific mobile premium content market grew 57.4 per cent in 2006 on the back of rising popularity of mobile multimedia content and a fast-growing mobile data services segment as users demand a richer experience on their mobile devices.

New analysis from Frost & Sullivan, Asia Pacific Premium Content Market, estimates that the market – covering 10 Asia-Pacific countries ex-Japan and Australasia – earned revenues of $5.98 billion in 2006.

Of this, an estimated 22.8 per cent were revenues retained by mobile operators, while the remaining $4.62 billion were third-party content provider revenue share.

The Asia-Pacific premium content market is forecasted to grow at a CAGR (compound annual growth rate) of 24.6 per cent to reach $22.38 billion by end-2012.

“We anticipate much of this growth to be driven by factors such as greater 3G coverage and deployment, as well as the declining cost of advanced multimedia handsets. 3G enhances user experience and encourages the development of compelling premium content applications such as music and video, identified as one of the fastest-growing segments in mobile entertainment,” said Frost & Sullivan senior research analyst Jeff Teh.

While messaging is likely to continue as the biggest contributor to overall mobile data revenues, recent trends have seen an uptake in premium content beyond traditional applications such as ringtones and wallpapers, to newer ones such as mobile music and video.

Mobile entertainment services continued to dominate at 68.5 per cent of the total premium content revenues (or $4.09 billion) in 2006, given the growing popularity of ringback tones (RBT), music and video downloads, and mobile gaming in Asia-Pac.

Mobile music and video accounted for 12.1 per cent of mobile entertainment revenues (or $495 million) last year and this is expected to grow to 21.6 per cent (to $3.1 billion) by 2012. Music and video applications are believed to hold the strongest potential to increase operators’ average revenue per user (ARPU).

However, sideloading of content over alternative wireline sources poses a threat. A large number of mobile users in developed countries, for instance, have easy and frequent access to the Internet, and may feel more inclined to use this medium for entertainment and information services.

“The availability of well-connected and ubiquitous Internet access enhances consumer preference for less expensive online content in many countries,” says Teh.

Mobile operators and premium content providers across Asia-Pacific have also started exploring newer business models and securing content partnerships in a bid to provide enhanced services to subscribers.

“Mobile advertising is emerging as an alternative revenue generator for mobile operators and content providers,” he says. “Operators are already exploring methods of providing advertising without being intrusive, focusing on personalization to deliver properly targeted advertisements.”

“With the ad-sponsored model, subscribers may need to pay only a small sum for content or not at all in time to come,” he adds.