MUMBAI: Strategy Analytics has issued a report predicting the mobile music market will grow from $10.6 billion to $16.8 billion by 2013. International Federation of the Phonographic Industries (IFPI) released a report indicating that global revenues for digital music grew by 25 percent to $3.7 billion last year. IFPI only counts the revenue which goes to the labels (which Strategy Analytics put at about 30 percent), and for that reason has never counted monophonic and polyphonic ringtones which generally pay composer royalties but not performance royalties. However, Realtones and mastertones are counted by IFPI.

"At the moment, ringtones account for around half the market which we measure in our data today" said Strategy Analytics analyst David MacQueen. "We believe paid, full track downloads only made 15 percent of the total mobile market in 2008. Ringback tones generated about twice the revenues of full track downloads - they are tremendously popular in Asian markets. The rest is streaming music services, such as Pandora."

However, MacQueen was not optimistic about 'ad-supported' music services because streaming services (which is the main medium for the business model) have not really taken-off on mobile. Strategy Analytics is broadly positive about bundling music with devices that come with music, but the lack of data on the levels of success achieved by these services adds a note of caution. Comes With Music has seen a reduction in price in the UK, but MacQueen noted several factors were at work including lower consumer spend during a recession, a possible bad choice of device, and poor marketing. "This is, after all, one of the first launches of a new business model so it is not surprising that the offer may need to be 'tweaked' somewhat before it finds its market," he said.