Opportunities in the paid music download market are on the rise with research outfit IDC predicting the sector to be worth $202 million by 2010.

Opportunities in the paid music download market are on the rise with research outfit IDC predicting the sector to be worth $202 million by 2010.

In its latest digital home research report, ‘Australia Paid Music Service Provider 2006-2010 Forecast and Analysis,’ the company also found that music provided by paid music service providers would contribute about 30 percent of total music sales.

IDC defines a paid music service provider as both legitimate online music and wireless music services which offer full track downloads.

Sophie Lo, IDC consumer digital markets analyst said that wireless music services were not expected to surpass paid online music services due to the low penetration of music-enabled handset, Digital Rights Management (DRM) standards and strong competition from existing and paid online music services.

IDC also found that the online platform was better-suited for the hosting of a large music catalogue, whereas wireless operators were more interested in hosting popular hits rather than a large music catalogue. However, this should not preclude wireless operators from investing in the paid music space.

"It will be in the best interests of mobile operators to leverage content in order to tie subscribers to their network as a means to face off commoditisation and stagnating revenue growth, especially in light of 3G migrations and its successor - High-Speed Downlink Packet Access (HSDPA) - to debut early during the 2006-2010 forecast period," IDC wireless and mobility analyst and report co-author Jerson Yau said.

Paid music providers were also encouraged to develop value-added content for the music services, Lo said.

"Paid MSPs can be creative in music offerings by leveraging the use of bundling and cross promotion of various music related services, such as bundling tracks with music news or reviews, to provide additional value," she said.