Consumers Very Pleased with Mobile Music and Would Accept Ads, Says MEF

By Reporter Wireless and Mobile News on March 24, 2009 1:51 PM

More than three-fourths of US consumers surveyed are pleased with their experience downloading and listening to songs on their mobile phone, and almost a third are willing to accept advertising on their mobile phones in exchange for free music downloads, according to results of a KPMG Survey announced today by KPMG LLP and the Mobile Entertainment Forum (MEF).

These results were among the findings of KPMG's third annual Global Consumers and Convergence survey of more than 4,000 people in 19 countries worldwide to understand trends in the use of mobile technology.

According to the study by the audit, tax and advisory firm, 21 percent of the U.S. respondents, and 30 percent globally, have purchased songs at least once on their mobile phones in the past 12 months. An overwhelming majority of the US (84 percent) and global (66 percent) purchasers said they were satisfied with the downloading and listening experience. A similar US survey conducted by MEF in 2007 found that only 26 percent were satisfied.

KPMG's study also identified a promising new finding for mobile advertisers, where 29 percent of the mobile phone users surveyed in the US said they were willing to see advertising in return for free songs. And globally, 49 percent of consumers will accept ads on their mobile phones in return for songs.

With the significant rise in mobile music customer satisfaction rates, we may be seeing a new window of opportunity that advertisers have been seeking for so long," said Carl Geppert, partner and U.S. Industry Sector Leader in KPMG's Communications & Media Practice. "We are seeing sizeable segments of the mobile marketplace that are willing to pay to download songs or accept advertising in return for free songs, and carriers as well as advertisers may need to examine their business models to accommodate those new growth opportunities."

Consumers also say they are more satisfied with their experience downloading and viewing video clips on their mobile phones. About 11 percent of the consumers canvassed said that they have watched video clips on their mobile phone in the past year, while 38 percent of users globally have watched video clips during the same time. In both the U.S. and globally, more than half of those who watched mobile video clips were pleased with the experience. In the 2007 MEF survey, only 28 percent of the US respondents said they were satisfied with the mobile video clips service.

"The results of the survey show a rapid and rising awareness by consumers of the types of mobile content available to them and the different ways they can access and acquire that content. The higher levels of consumer adoption and the greater usability of the services on offer have directly contributed to increasing the global mobile entertainment industry from $25 billion last year to a predicted $32 billion this year," said Jim Beddows, Chair of MEF Americas. "The MEF Mobile Video Initiative will help the industry further capitalize on the clear consumer willingness to engage with the services -- whether it is paid for content or ad supported."

KPMG and the MEF also will be sharing the findings of the KPMG survey with attendees in booth 1400Q in the M-Tertainment Pavilion at International CTIA Wireless 2009(R), April 1 - 3 at the Las Vegas Convention Center.

Among additional mobile music findings in KPMG's survey, the four items most often identified as influencing the purchase of songs are, in order of priority:

in the US, privacy of personal information, clear pricing information, the cost of the service and the download speed.

globally, clear pricing information, the cost of the service, the ability to save music on the mobile phone and high-quality customer care.

Today's announcement of the convergence and consumer survey results is the latest in a series of collaborations between KPMG and MEF on trends in mobile entertainment. Last month, the two organizations announced the creation of the quarterly MEF Business Confidence Index, the results of a survey gauging the confidence of the $32 billion mobile entertainment industry. The first MEF BCI revealed that MEF members predict an average increase in revenue of 27 percent in the next year, in spite of the economic downturn.

More information on KPMG's 2008 Consumers and Convergence study will be presented during a webcast in late April.