By Shailendra Pandey, Senior Analyst, Informa Telecoms & Media (UK) In association with Informa Telecoms & Media This presentation highlights key facts and figures that indicate how mobile social networking is beginning to provide a significant push to mobile music services and the likely impact on the market in the next 5 years.

1. How mobile social networking is driving the adoption and usage of
mobile music services
This report highlights some facts and figures that indicate how mobile social networking is beginning to
provide a significant push to mobile music services and the likely impact on the market in the next 5 years.
The last two years have seen mobile social networking and community based services and applications
receiving growing attention and investment from the mobile industry. Informa Telecoms & Media believes
that in 2008 there were over 200 companies worldwide focusing all or a significant portion of their
attention (more than 50% internal mindshare) on mobile social networking.
In September 2008, Informa Telecoms & Media conducted the annual Mobile Content & Services Industry
Survey. Of the 307 telecom industry professionals who participated in the survey, 71% believed that
social networking & community services will have a significant impact on driving P2P uptake of mobile
content.
Social networking and community services will have a
significant impact on driving P2P uptake of mobile content
disagree
11%
neutral
18%
agree
71%
Based on replies from 307 survey participants
Many operators are therefore now offering mobile social networking services as part of their business
strategy.
As an operator explained it in an interview, “Mobile communities are good for business because they put
a personal sound and face on what is otherwise a pipe and a bill.”
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2. Mobile operators which have mobile communities as part of their business strategy
Mobile Music Industry
The mobile music industry generated over $9 billion in revenues in 2008. This includes revenues from
ringtones, ringback tones, full-track downloads and music streaming services (excluding music videos).
Overall, the revenue from mobile music segment is growing globally and the decline in growth of ringtone
revenues is being bolstered by the growth of the full track download market, as well as music streaming
services and the associated subscriptions. However, for some markets the real growth is coming from
ringback tones. In China alone, there are estimated to be in excess of 110 million subscribers to RBT
services. The US and Western Europe has yet to see anywhere near this amount of usage, but the
number of subscribers is rising.
Mobile operators and mobile music service providers are experiencing that the presence of social
networking or community feature as part of their music service can make the service more user-friendly
drive greater usage and also help in reducing customer churn.
Main User Activities in Social Networks and Communities
To evaluate the impact social networking feature can have on a mobile music service, it is important to
analyse the main activities of users in mobile communities.
The main activities of users can be classified in three main categories:
- Connecting
- Conversing and
- Using/creating/displaying content
Connecting
Activities include managing lists of friends, groups and connecting to others with similar interests.
When part of a mobile music offering, this can include allowing users to connect with their favorite artists
and join groups of their preferred music genre. Well known artists can use this to have a more direct
2 relationship with their fans. For upcoming artists, it is an easy and quick way to promote their music to

3. targeted users that may be interested in that kind of music. Therefore social networking sites are now
increasingly used by artists. For example, social networking site Bebo gained 120,000 artists in just three
months after its launch in 2006.
Conversing
The activities include sending messages, initiating a dialogue, asking for opinion and providing feedback.
When part of a mobile music service, this can include allowing users to have dialogue with other
community members as well as allowing them to comment on, rate, forward and recommend music to
others with similar interests. Artists can keep their fans informed about their upcoming gigs, concerts and
tours and form a closer bond with their fans.
It is still early days but another potential opportunity is digital gifting where users can buy music tracks
and ringtones and give them as gifts to their friends and contacts in the community. The feature is already
popular in some dating communities and it is expected to be well received in more general mobile
„friending‟ communities.
Using/creating/displaying content
This includes a broad category of content including photos, audio and video media as well as interactive
digital assets (games and applications). The social networking features/activities evolve around the
content to „glue‟ or hold together the community.
As part of a social networking feature within a music service, this can include activities such as enabling
users to load their preferred music on their personal profile pages. The music could, for example, be a
personal favourite song or could be a reflection of exactly what the user‟s mobile music player is also
playing at the same time.
Music streaming from personal page is similar in concept to a ringback tone and a natural extension of
mobile devices doubling as mobile music player. It is a setting or a selection which is made from a menu
and managed by a community member to offer the person/people who are visiting a page, or perhaps
only while in communication with the community member, a music experience via streaming.
This feature can perhaps be provided in combination with a digital music sampling service, mobile music
portals, or sponsored by performing artists who wish to have their music heard by potential new fans.
Respondents of Informa Telecoms & Media‟s Mobile Social Networking survey rated this feature as being
relatively important already: 42% of respondents rated it as important or critically important in 2008, rising
to 62% rating it as either important or critically important in 2010.
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4. Relative Importance of Music Streaming Feature for Users in a Mobile
Community
40%
35%
30%
25%
20%
15% 2008
2010
10%
5%
0%
1 (of no 2 3 4 5 (critically
importance) important)
Informa Telecoms & Media Mobile Social Networking Survey 2007
Examples of Mobile Music Services driven by Social Networking Features
Omnifone’s MusicStation
MusicStation became the UK‟s largest subscription based unlimited music download service within seven
months of launching on Vodafone. Vodafone offers the service to its subscribers for £1.99 per week with
no data charges. Recently Vodafone has also started offering the service on selected price plans at no
extra charge.
MusicStation includes a community feature “Buzz” that makes the service more attractive and user-
friendly. Users can read the latest music news, share music and playlists with other users, and find
people with similar music tastes. In addition to using the search function for downloading tracks, users
can benefit from easy discovery of music through recommendations from other community members. For
example, if a user does not have time to search for music tracks, he/she can listen to the playlist of other
connected community members who may have similar music tastes.
According to Vodafone‟s ICM Survey of MusicStation users in July 2008:
Over 50% of all MusicStation users use the Buzz section of MusicStation to discover, recommend
and share music
84% of MusicStation Buzz users satisfaction was rated 7/10 or greater for being able to share
their playlists with other users
MOKO.mobi (formerly known as Loop Mobile)
MOKO.mobi is a platform designed specifically for mobile that has grown outwards to be fully integrated
with the web. There are now over a million registered users of the service. The service is offered by
several mobile operators and MVNOs including Helio, Virgin Mobile, America Movil, Telstra, 3, Singtel
and SMART.
The MOKO music mobile community was launched in December 2007. At launch, it included profiles of
over 600 music artists from both major and independent labels, along with a host of amateur and
unsigned artists to MOKO users globally. The service allows users to communicate with their favourite
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5. music artists and music labels via their mobile phone. Artists have their own profiles, homepages, photo
galleries, music audio and video file streaming, gig guides and fan lists.
Cyloop Mobile
Cyloop mobile is a mobile music community application that provides users of Cyloop.com with real-time
mobile access to their favorite artists and user profiles from any WAP enabled mobile phone. Also, if
users hear a song they like on the radio or at a club, they can immediately go to Cyloop Mobile and
access the artist‟s profile to buy the song.
In addition to managing their playlists on the mobile phone, users can access artist profiles, read blogs
and latest news and post comments on any profile. Artists are able to log into their profiles and see their
page statistics, such as who visited their profiles and listened to their songs, including detailed
demographic and geographic data.
TIM’s ‘mytones’ Service
In Italy, TIM has partnered with Buongiorno Vitamic to offer its GPRS and UMTS subscribers „mytones‟
service, combining mobile user generated music content and social networking. Consumers create and
upload ringtones, which is then made available for streaming and downloading.
Creators of highly rated ringtones are rewarded with prizes such as free top-up credits. The continuing
consumer interest in mobile music is the main reason that TIM and Buongiorno Vitamic launched
mytones.
Other examples of music services driven by social networking and community features include Shazam,
Bebo Mobile, phling!, MyStrands and Vodafone Music Reporter.
Informa Telecoms & Media’s Predictions for Market Growth
It is difficult to determine the actual revenue contribution from social networking and community features
in mobile music services. However, Informa Telecoms & Media has come up with some predictions based
on research on some popular mobile music services.
The forecasts are based on the following findings -
About 70% of music streaming and download services now have social networking/community
features
Around 40-50% of those service users use the community feature
10-15% of the music users listen to is recommendations by others
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6. Revenue Contribution of Social Networking Features in Mobile Music Streaming and Full-track
download services
Revenue Contribution from Social Networking features
Global Revenues from Mobile Music Streaming and Full-track download services
11,852
9,142
$ Millions 7,015
5,458
4,315
3,339
1,559
644 998
180 274 416
2008 2009 2010 2011 2012 2013
Source: Informa Telecoms & Media
Key Findings and Conclusions
Informa Telecoms & Media believes that the integration of social networking and community features in a
mobile music service can drive service usage and adoption by:
Making the service more user-friendly and enabling easy discovery of music tracks.
Reducing churn and making the service more sticky (users will continue to subscribe to stay
connected with friends and contacts).
Promoting digital gifting where users purchase ringtones, music tracks and albums to give as gifts
to other community members.
Generating higher revenues through discounts and promotions by sponsors to community
members. For example, a community member who recommends an album or music track
receives a reward if the content is purchased by other community members as a result of the
recommendation.
Driving the market for mobile music sales direct to fans through artist driven websites.
This special report for MidemNet 2009 is based on forecasts and findings from Informa Telecoms &
th
Media’s recently published Mobile Content & Services 7 Edition report. Further details can be found at
www.informatm.com/content
Shailendra Pandey
Senior Analyst, Mobile Content & Applications
shailendra.pandey@informa.com
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