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Mobile Operators Should Partner With Music Streaming Services

October 18, 2010

A new study has found that mobile operators need to ditch their music download stores and partner up with music streaming services if they wish to generate more revenue.

According to a market research study released on Monday, a Western European operator with 20 million customers could reach revenues of $109 million each year from new users.

Research firm Informa Telecoms & Media said that revenue saved from expenses would also contribute to that figure.

“Our research shows a large Western European operator could generate millions of revenue per year by partnering with a third-party music service — significantly more than they would gain from offering their own service,” Informa’s analyst Giles Cottle told Reuters.

Handset makers like Nokia have offered music download services to try and compete with Apple’s dominating iTunes.

“The music download services operators launched prolifically over the last five years are commodities which have almost universally failed to deliver,” Adrian Blair, head of European business development at Stockholm-based music streaming service Spotify, told Reuters.

The study used examples like Denmark’s TDC, South Korea’s SK Telecom and Swedish TeliaSonera who offered their own streaming services.

The study said that the companies managed to increase mobile data revenue by offering music streams that work on various devices.

Music is seen as a value-added service that can help operators gain market share and sell more high-end smartphones.

Streaming services like Pandora and Rhapsody may also see an increase in revenue by partnering with mobile operators.

Most streaming sites are free for users and they have tried to build a big audience so they can earn money by selling display ads.

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