A new report from Juniper Research warns that the ongoing global recession could significantly cause the mobile entertainment market to decline. Juniper’s best case scenario estimates that the market will reach nearly $36 billion in 2010, while the worst case could see the market declining to 7% growth per year.
Using a scenario-based approach to assess the impact of the recession on the mobile entertainment industry, the report found that average annual growth over the next two years declines from nearly 19% under the best case scenario to less than 7% in the worst case, with mobile TV, user-generated content and music amongst those sectors which are particularly exposed.
Among the reasons quoted are lower discretionary spend, lack of available funding for developers, and faster migration to ad-supported apps and services.
Report author Dr Windsor Holden argues that operators may perceive that consumers will be increasingly reluctant — or unable — to purchase content. As a result, they [operators] may be less likely to roll out expensive, higher risk services: mobile TV is a prime example.
However, the Juniper report found that some sectors, such as adult services and gambling, were less exposed than others.
Other findings from the report include:
- Under all scenarios, mobile music will remain the largest single mobile entertainment sector, despite the continuing decline in revenues from ringtones
- In addition to the negative impact of the downturn, growth in service deployment and adoption remains constrained by the excessive cost of data services across many markets.
More information about Juniper’s study “Mobile Entertainment in a Recession: Scenarios, Markets & Forecasts 2009-2013” is available from their website.