Creating a successful mobile music application takes more than just knowing hardware and software; it requires an understanding of the intricate web of participants involved in the music business, from content creators to record labels, rights organizations, distributors, retailers, and mobile operators.

This article is the first in a series intended to give developers an overview of the music industry, provide insight into the realities of the music business, cover business and legal processes, technologies, market trends and more.

Introduction

Mobile music is taking off in a big way. Research firm In-Stat forecasts that multimedia phones will show dramatic growth over the next several years, doubling in unit sales within the next two years. According to a 15-country study conducted by market researcher TNS, nearly 20 percent of mobile phone users polled listen to music on their mobiles, compared to 15 percent who listen on home stereos and 10 percent on dedicated digital music players like the iPod. Sony Ericsson shipped three million Walkman mobile phones during 2005 alone.

With the mobile phone firmly established as a credible digital music player, mobile music-related applications are becoming an increasingly important component of Sony Ericsson's product offering. The time is ripe for music-related Java ME and Symbian OS based applications. Potential music related application areas are playlist management, download agents, FM and Internet radio solutions as well as using music and sound effects in other types of applications.

Sony Ericsson is uniquely positioned to act as a bridge between the music industry and the mobile developer community. Cross-functional relationships with Sony provide Sony Ericsson with unique insights into the music industry that can be passed on to the developer community.

The players

To get a sense of the participants involved, we'll follow a song from creation to delivery. There is a very complex structure relating to the management of copyrights and distribution of royalties, which will be covered in depth in a later article. For now, we'll just look at how the song travels from the mind of the songwriter to the ears of the listener.

The first link in the chain is the songwriter who creates the music and lyrics of the song. When the song is completed, it is put in the hands of a music publisher who finds musicians to record the song and also manages the publishing royalties. The musician, also known as a recording artist, usually has an exclusive contract with a record label, whose job is to manage the production, manufacturing, distribution, promotion and collection of royalties for the sound recording. The record label places the recorded song with music stores who sell the recording directly to listeners, collect payment and report sales for the purpose of tracking royalties. The label also places the song with radio stations that broadcast the song and are responsible for reporting the number of times the song is played to performance rights management organizations who are responsible for collecting license fees and distributing performance royalties.

The chain as described up to this point applies to all forms of distribution, both physical and online. However, the introduction of online distribution has changed the rest of the process quite dramatically.

Record labels often work with third-party distributors to place their recordings in music stores and ensure that their products get prominent placement on the shelves. In the case of online distribution the record labels often work directly with the online store, without using a distributor. This is possible because online delivery eliminates the need to manufacture and deliver a physical object such as a CD.

Online stores involve a few more links in the chain. The first is the network provider. In the case of internet delivery, that means an ISP. In the case of over the air (OTA) delivery to a mobile device, that means a mobile operator. And finally, there is the device manufacturer who creates the device used to play the song, which could be a computer, a portable digital music player or a mobile phone.

There are other distribution chains as well relating to the use of music as soundtracks for games, films or commercials, and those will be covered in future articles.

Service Definitions

One of the strengths of network delivery of music is that because the music exists as a digital file, it can be manipulated as pure data, allowing it to be incorporated into a variety of software-defined services.

There are number of different mobile music services available today. Although they are all based around digital distribution of audio files, the  use of music data can take a wide variety of forms:

• Ringtone
  A generic term generally referring to customized ring signal. The signal can be a polyphonic ringtone, which uses MIDI files to trigger a built-in sound generator in the phone or a Realtone which is a short digital sample of an actually music track.
• Full song download
  As opposed to a Realtone, with is a brief clip of a song, this is a full copy of the song, permanently stored in memory and usually intended for listening in a digital music player.
• Streaming
  A stream is an audio file delivered over a network and played in close to real time. It is not permanently stored on the playback device.
• Preview
  A lower-resolution audio file that can be delivered quickly in low-bandwidth situations.  Preview files are intended to offer a "try before you buy" option for online music stores.
• Per-song purchase
  A revenue model for music distribution in which a listener purchases a permanent copy of a song from an online store
• Subscription
  An alternate revenue model to the per-song purchase model.  In the case of a subscription, the user pays a monthly fee to gain access to a library of music.  The music files can only be played as long as the subscription fee is paid.
• Preloading
  Some operators and handset manufactures offer handsets that come with a collection of music files "out of the box." This is often done as a promotion in conjunction with a specific artist or record label.
• Super distribution
  A proposed form of file sharing that would allow one user to send a song file to another user. The second user will be able to listen to a short preview of the song and then be given the option to purchase a key to unlock that song file.
• OTA
  Acronym for "Over the Air" and in the case of mobile music, refers to music files downloaded via the radio interface, as opposed transferred from a PC using a USB or Firewire connector.

Market trends

Ringtones
Ringtones are the hot mobile music service right now and will continue to account for the majority of revenues for the near future. The importance of this channel was driven home when Billboard Magazine launched the "Hot Ringtones" chart in the fall of 2005, tracking the top downloaded tracks.

Full song downloads
Japan is currently the market leader in full song downloads. The Recording Industry Association of Japan published digital sales data for the first time during 2005 and reported that mobile-based downloads totaled 72.1 million units from July to September, up 25 percent over the previous quarter.

During the fourth quarter of 2005, mobile-based downloads in Japan totaled 77.4 million, up 7 percent on the previous period, for a wholesale value of USD 81.3 million. Mobile downloads during the fourth quarter accounted for 94 percent of all downloads on a volume basis, and 91.4 percent in terms of value.

Mobile music users increasing
The research firm IDC has predicted there will be 50 million wireless mobile music users in the United States by 2010 and predicted that by the end of this year, the number of U.S. OTA customers will likely be approximately half that of online music service users, but may surpass them by the end of the forecast period.

Mobile music stores
Mobile music stores currently mimic their internet-based counterparts but with a few significant differences. The first and most obvious being that the mobile phone interface is quite different and somewhat limited in comparison to the PC. Which is something that needs to be considered when building a mobile music store.

Another and perhaps more significant difference is in the nature of the participants behind the stores. On the internet, the ISPs providing connectivity are not strong contributors in music retailing because they function primarily as "bit-pipes" and don't have strong market identities. Service providers and content creators such as iTunes, Napster, and Sony dominate online music sales. In the mobile world, connectivity is handled end-to-end by the operators who also have strong brand identities. Companies such as Vodafone, 3, and Sprint have already established strong presences in mobile music retailing.

Future topics in this article series
Future articles in this series will cover topics such as audio codecs, bandwidth issues, Digital Rights Management, and case studies and interviews with major players in the mobile music business.

More information:

• Mobile music application development resources>>
• "Five reasons to develop for Sony Ericsson Walkman phones", June 2006 news article>>