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SINGAPORE: In 2008, the global digital music business grew some 25 per cent to US$3.7 billion. According to industry experts, digital platforms now account for around 20 per cent of recorded music sales, up from 15 per cent in 2007.
Experts said music industry revenues in the next few years will increasingly come from deals with handset makers and other technology companies.
One such deal is Nokia's "Comes with Music" service, which started in the UK last year. Singapore is the second market worldwide to have the service, followed by Australia.
Sandy Monteiro, senior VP, Digital Music, Universal Music, South East Asia, said: "There needs to be a new format that drives the business forward again. We always knew digital was the answer, but for all this time, we've never been able to figure out a model that actually makes money, given the fact that music is so available on the net or so freely available that people were getting the music they wanted, but not actually paying for it."
Unlike the iTunes a-la-carte menu, Nokia's subscription service gives unlimited access to downloads. But there's one catch – the downloads are copyright-protected, so users are limited to one copy each on their PC and their phone.
Adam Mirabella, director, Global Digital Music Retail, Nokia, said: "We have dialogues going with all of our partners and Digital Rights Management-free (DRM-free) is also on the roadmap for the future integration of 'Comes With Music'."
According to the International Data Corporation (IDC), 2008 figures show that Nokia has a whopping 50 per cent market share in the Asia Pacific region, while Sony-Ericsson has about 5 per cent. Apple's iPhone has penetrated less than one per cent of the market.
Aloysius Choong, research manager, Asia Pacific Personal Systems Research, IDC, said: "The future of mobile music is in the mobile phone and I think that's where Nokia has the home-court advantage, if you will. I do believe that it will have a significant threat, especially in Asia, to Apple and whatever Apple can offer."
Experts said Nokia's success also depends on how telcos subsidise the cost of the phone.
"There is an ongoing tussle. We've seen this in some other markets like in Europe where, maybe, the operators are not so happy with some of the moves the device makers have been coming up with," said Mr Choong.
While there are still issues to be resolved, one thing is certain – the way you buy and listen to music will evolve constantly.
- CNA/so
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