Yesterday eMarketer released a report with mobile music revenue forecasts through 2012. The title, "Mobile Music Searches for Hit Formula," says it all because the winning formula has thus been very elusive.

Global mobile music spending, predicts eMarketer, will total $3.3 billion in 2008 and to $4.5 billion in 2009. The figures exclude monophonic and polyphonic ring tones and include major markets such as the U.S., Japan, China, UK, Spain, Germany and South Korea (but excludes many significant markets like Australia, Russia and Brazil).

eMarketer predicts ad-supported mobile music to grow at a smokin' compounded annual growth rate of 53.4% through 2012. "Marketers will account for a greater proportion of that overall spending as the ad-supported model for mobile music gathers steam," said John du Pre Gauntt, the analyst who wrote the report.

According to M:Metrics, only 5.7% of mobile phone users in the U.S. listened to music on their mobile phones in November 2007. The majority of music on the mobile phone was sideloaded from a PC. In January 2008, says M:Metrics, the percentage of U.S. mobile phone owners that used the device to listen to music was 6.7%. But 28% of smartphone owners used their devices for music, and 74.1% of iPhone users used the device to listen to music.

If current U.S. trends are any indication, mobile subscriptions will struggle to remain relevant and sideloading will be the prime source of songs on mobile devices. The current generation of services don't look like they're going to move the needle any time soon. The most popular mobile music apps will be free services like Pandora and last.fm on Internet-ready devices (they're off to a great start at the iTunes app store). Nokia's Comes With Music is a wild card and will test the degree to which people can base their digital music acquisition on a mobile device (as opposed to the PC). It's most likely that a Nokia service will be a complement to, not a substitute for, existing music acquisition and listening for the next handful of years.

In its Recording Industry In Numbers 2008 report, the IFPI put the 2008 global digital market at $2.9 billion (in trade dollars, not total consumer spending).

To talk about digital and mobile music in terms of a global market, though, misses the differences between markets. (The eMarketer report breaks down global revenues by markets. The free preview does not show the separate charts.) The thing to understand is markets differ radically when it comes to mobile patterns. In the US, ring tones and mobile downloads account for under 10% of total digital trade revenue. In Canada they total about 12%. In Japan, mobile single tracks account for 45% of trade revenue from digital music, and ring tones (both master ring tones and ringback tones) account for 42%. In South Korea, streams represent 25% of trade revenues from digital music, subscriptions 13% and mobile single tracks only 3%.

[music jobs] HR Manager at EMI NA; New York, NY.