Report: Mobile Music Taking Off, Ringtones Not

The mobile music industry is set to nearly double worldwide in the next five years, while the ringtone industry will stay relatively flat, Juniper Research predicts in a report today.

Juniper analyst Windsor Holden projects the worldwide mobile music market to grow from $8.9 billion last year to $17.5 billion by 2012, as more people use their mobile phone as a music player.

What will lead growth? Full-track, over-the-air downloads, and subscription music services, Holden says. Also: China/Far East, which he expects to account for more than 40% of the mobile music market over the next five years.

Meanwhile, less exciting news for the ringtone industry. Holden projects it will grow from $5.5 billion last year — 62% of the broader mobile music industry — to $6.6 billion by 2012 — 38% of the industry. Which makes sense: Why buy a ringtone when you can download the whole song for a fraction of the price?

This is mostly good news for carriers like AT&T (T), Verizon Wireless (VZ-VOD), and Sprint Nextel (S), which can cash in on the growth drivers: They get revenue kickbacks for promoting subscription services, and could/already operate their own over-the-air music download stores.

But it’s also possible that growth could come from places like Apple’s (AAPL) wi-fi music store on its iPhones, which operates independently from exclusive U.S. wireless carrier AT&T.

See Also: Mobile Game Downloads: No Growth

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