Mobile Music A $11 Billion Industry By 2011Mobile Music A $11 Billion Industry By 2011

Music delivered to mobile phones will account for almost 30% of global retail music values by 2011, according to a report released Tuesday.

Understanding & Solutions has forecast that mobile music will bring in $11 billion by then and begin to make up for some of the decline in music revenue. The industry now accounts for about 14% of global retail music revenue, according to the report.

The U.K.-based company said that an increase in handsets with music capabilities and other manufacturer and operator developments encourages growth of mobile music by improving users' ability to search for, purchase, and listen to mobile music.

Still, manufacturers and developers must continue to improve interfaces and software to make the mobile experience comparable with online, according to the report. "Alongside online, mobile music is essential to the future of the music industry," David Sidebottom, consultant for market research company Understanding & Solutions, said in a prepared statement.

He said that Japan has the most efficient mobile music landscape, closely followed by the United States.

"Both countries have a concentrated operator base and a large pool of potential subscribers, providing economies of scale for the music companies," Sidebottom said. "In the fragmented European market, some operators have become less aggressive, as they can't make money directly from selling full track downloads, but this will pave the way for 'off-portal' and third-party service providers."

In emerging markets, mobile could become the top platform for music, where CDs haven't gained traction due to piracy and lack of hardware ownership, he said.

China and India also show big revenue gains, driven by strong mobile subscriber growth and the status associated with music-related personalized mobile products, Sidebottom said.

The recording industry has complained for years that piracy and other forms of digital theft do more than just hurt their own profits. A report from the Institute for Policy Innovation found the recording industry loses about $5.33 billion, while retailers lose about $1.04 billion, for a total direct loss of $6.37 billion, due to music piracy.