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Mobile Music A $7.3 Billion Industry By 2011

Research firm eMarketer predicts that music sales as a whole will continue to decline, but online and mobile markets will grow rapidly.

Music on mobile devices is expected to account for $7.3 billion of the global amount spent on recorded music by 2011, according to new data from eMarketer.

The report, titled "Recorded Music: Digital Falls Short," predicts that music sales as a whole will continue to decline, but online and mobile markets will grow rapidly.

As more and more multimedia-capable handsets are released, the mobile music market is expected to jump from $1.7 billion in 2007 to $3 billion by the end of the year. The figure is estimated to grow to $4.8 billion in 2009, $6.2 billion in 2010, and $7.3 billion in 2011.

As CD sales plummet, the music industry is expected to see a $5 billion decline in total music sales in the next three years, from $31.8 billion to $26.2 billion. Because of this, record labels will look to the mobile space for additional revenue.

On Tuesday, Nokia inked an agreement with Warner Music Group to make its library available on Nokia's Come With Music service and music store. According to a report from The Register, the record labels are receiving a very lucrative deal with these types of mobile ventures.

For this report, "mobile" includes master recording ring tones, full-track audio downloads, ringback tones, music video downloads, and streaming services. It did not include licensing revenue or polyphonic or monophonic ring tones in its estimates.

Online sales will increase as well, going from $1.9 billion in 2006 to $7.5 billion in 2011, the report said. In three years, online and mobile sales will account for the majority of music sales, with 56% of the total market.

Music companies need to integrate with online platforms to enhance the mobile music listener's experience, eMarketer said. In this vein, Verizon Wireless and Rhapsody announced Monday a partnership that allows wireless customers to download DRM-free MP3s directly to a mobile handset.

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