A new industry report published by analyst Understanding & Solutions forecasts the mobile music sector to account for more than US$11 billion in revenues by 2011, amounting to a 30% increase over current revenues.
Mobile music refers to the emerging business of delivering music to mobile phone subscribers over cellular networks.
The report predicts the increase will help offset the decline in packaged music revenues.
"Alongside online, mobile music is essential to the future of the music industry," said Understanding & Solutions consultant David Sidebottom. "Japan, closely followed by the USA, has the most efficient mobile music landscape: both countries have a concentrated operator base and a large pool of potential subscribers, providing economies of scale for the music companies."
Most new handsets now come with built-in music functionality, and recent developments from manufacturers and operators have helped improve the user experience when searching for, purchasing and using mobile music. However, interfaces and software need to continue to improve to make the mobile experience comparable with online, Sidebottom argued.
"Looking to emerging markets, mobile could become the number one platform for music, where packaged CDs haven't gained traction due to piracy and lack of hardware ownership," he explained. "Both China and India are showing large revenue gains, which are being driven by strong mobile subscriber growth and the status associated with music-related personalised mobile products."