Smartphones’ Rise Spurs New Growth in Mobile Music, But Payment Could Be A Problem

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According to The NPD Group, nine million new mobile-music listeners, young and old alike, entered the market in 2010.

“More than half of mobile music listeners currently prefer to listen to their own music, and most prefer free music to paying for it."

According to a new report from The NPD Group, a leading market research company, a steady increase in smartphone purchases, combined with the growing options for mobile music, helped fuel an increase in the number of active mobile-music consumers by almost nine million in 2010. Year- over-year mobile music listening increased from 12 percent of U.S. Web users in 2009 to 17 percent in 2010. In fact the ability to stream, download, or listen to music is the second most-used utility for Apple iPhones and Android phones, behind downloading apps and ahead of sending photos.

“The introduction of the iPod ushered in the recent wave of mobile music, but the next generation is spurred by increased smartphone penetration and myriad services offering mobile access to music,” said Russ Crupnick, entertainment industry analyst for NPD. “The number of mobile music users is not only growing, but also includes more women and older listeners -- beyond the avid, young, and typically male first adopters – and that means more opportunities to market a wider variety of music to more fans of all ages.”

Payment Could Be A Challenge

While many people question whether access to music is on a par with ownership, according to NPD’s “Mobile Music Report,” more consumers are now placing their own music collections on their phones than are using Pandora and other mobile radio platforms, which is aided by the ease of adding music to iPhones. Among those using Internet radio or music-on-demand options, the overwhelming majority are taking advantage of free or ad-supported options to get their music, but the probability of them ever paying for it is low. Eight out of ten consumers claim that what they get for free is good enough, so they have no need to upgrade from a free version of these programs. Very few consumers are willing to pay extra for the ability to access their music when they are out of range of their carriers’ service.

“More than half of mobile music listeners currently prefer to listen to their own music, and most prefer free music to paying for it,“ Crupnick said. “That’s a challenge for paid services to create and offer the most incremental value, which will be critical for companies looking to supplement the ad-supported model.”

Data note: Information in this press release was derived from an online survey fielded to U.S. consumers. Final data is based on 3,101 respondents aged 13 and older who reported listening to music on their mobile phones.

About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us, visit http://www.npd.com/, or follow us on Twitter: @npdgroup.

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