Mobile Music App Revenue & Predictions

TThe surge in mobile music apps has been significant. But how much are they earning the music business, and what will change in five years?

It’s easy to understate the cultural effect of the mobile app market since Apple’s game-changing App Store launch in 2008. But a new Midem report outlines how the growth of the mobile app world has impacted on the music industry, which we’ll summarise here.

This article will outline the growth of music apps and discuss what kind revenue they attract, before detailing the predictions for revenue expected in the future.

According to Informa Telecoms & Media, the global mobile music industry generated $14.4 billion in 2010:

Ringtone purchases remain the most popular music transaction, but this is probably something that will only benefit major label artists at a global level. But full track downloads and music streaming still account for $4.7 billion in sales.

Today, most mobile music services are still using the more traditional pay-per-track system like you see with iTunes. But increasingly there is a move towards offering full track downloads as a ‘free’ extra to be bundled with subscriptions or even cellphone contracts. One cited example is from UK cellphone provider Orange, whose Monkey pay-as-you-go service, which gives you free music every time you top up your calling credit. In a similar example from the UK, the provider O2 allow customers to pay for gig tickets through their monthly phone bill.

One market trends is the decline of full-track downloads through ‘old’ mobile music stores, such as Buongiono in countries such as France, Japan, Spain and the US. For example, in Italy there was a 40% drop in these sales between 2009 and 2010, but mainly because users are moving towards apps like iTunes.

Midem observe that the biggest blow to traditional mobile music services have been Apple and Google, who offer an ‘over the top’ service which replaced and improved on older methods of music distribution in westernised cultures.

How many music apps are in the Apple App Store?

When you consider that many of these apps might often duplicate the functionality of others, it could be considered overkill. But ultimately, a premier league of the finest apps have become prominent, such as Spotify (unavailable in the US at present), TuneWiki, Midomi,, Pandora, LaDiDa, Soundcloud, Shazam and FourTrack which turns iPhones into a classic four track recorder.

More recently, there are options for non-developers to build their own mobile apps. One such service is Mobile Roadie, which your own band or business can use a template through their website to submit an app to the store, The same service is used by mainstream artists such as Katy Perry.

What will the mobile music market look like in five years?

ITM estimate it will grow from the current $14.4 billion to more than $25 billion in 2014, with full-track downloads seeing the strongest growth over the next four years, though in our opinion this chart underestimates the potential for music streaming to become a dominant force.

Other ‘direct to customer’ applications are expected to build the demand for full track downloads, though it would seem difficult for a new or existing business to present a genuine challenge to Apple who lead music downloads with their iTunes store.

Smartphone users will continue to more towards online services rather than their existing mobile service provider as a means to buy or access music, though brand tie-ins as previously mentioned between Orange and Spotify may increase.

Written by Tom Davenport.