Are Carriers Crushing US-Based Mobile Music?

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The US-based mobile media market has always been a giant step behind its European – and especially Asian – counterparts.

But what is stunting growth in the stateside market?

Plenty of factors are potentially in play, including awareness problems on newer music formats like ringback tones.  But major cultural and consumer differences cannot be ignored.  After all, Americans have the disposable income to purchase mobile media assets, just like they have the money to purchase expensive iPhones, subscribe to high-end wireless plans, and barrel though endless text messages.

That introduces the question of whether carriers are killing an early-stage media market by imposing heavy percentage demands.  According to Chris Brunner, Vice President of Mobile Content & Services at Univision Communications, carriers are cramping entrants and innovation with heavy access percentages.  “We do all of the marketing, branding, content creation, billing, and customer care, but we get less than the carrier does,” Brunner explained to Digital Music News during the Mobile Monday symposium in Los Angeles.  “40 percent goes to the carriers, without us ever seeing it.”

And Brunner has the heavy promotional machinery of Univision, a massive television network tailored to the US Hispanic market.  But not everyone has such a grand network to utilize.  “It just completely shuts the market down, because the only people that participate in that marketplace are big media companies with the inventory to run it on the air,” Brunner continued.

Carriers see the issue differently, especially given the upfront, multi-billion dollar sunk costs associated with their networks.  But Universal Music Group digital and mobile executive Rio Caraeff pointed to heavy differences between Asian and American carrier demands.  “The average carrier revenue share for off-deck transactions in the US is 35-40 percent,” Caraeff said.  “It would be as low as 9 percent in Japan.”

Report by publisher Paul Resnikoff in Los Angeles.