Bundling Music—The Future of the Mobile Music Industry
CAMBRIDGE, Mass. - The most significant shift in the mobile music market will come in the form of bundled music, or as it is more commonly known, subscriptions, says Pyramid Research in its latest report, From Apple to Orange: How MNOs Can Make Mobile Music Profitable in an iTunes World.
“A cultural shift is forming in this generation’s consumers, from owning to renting” comments Nick Holland, Senior Analyst at Pyramid and author of the report. “Consumers are becoming conditioned to accept that virtual digital content is the norm and therefore physical ownership is no longer seen as necessary.”
The report argues that the devaluation of ownership means that models offering access to vast digital libraries on a rental basis are in many ways more compelling than just having access to content that is purchased. The downside of this argument is that the library is only accessible while a subscription is current, but for many people this is a small price to pay for the opportunity of nearly infinite content discovery.
“As today’s children inevitably come to own mobile handsets, the delivery of music and any other form of digital content will be over a broadband connection rather than via physical media,” continues Holland. “For these consumers, the difference between owning and MP3 and renting an MP3 will have little meaning.
The report continues to say that bundling is not a new concept to telcos and cable providers, who have been pushing discounted triple-play packages for a number of years. One advantage offered by bundling is disguising the price of individual services, so that the consumer believes (rightly or wrongly) that they are getting a bargain compared to paying for all the constituent parts separately.
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