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Sharing is music to consumers’ ears 
Music consumers and artists are forging a business model built on sharing and a sense of personal engagement. Companies must accommodate this new reality to maintain the mobile-music market’s rapid growth.

Music is both inherently social and intensely personal. And these two different yet complementary forces are driving the explosive growth of mobile music and the digital music market as a whole, says Urban Nyblom, an Ericsson ConsumerLab advisor.

"Music is something very emotional," Nyblom says. "People are willing to pay for music they really like and are involved in. The question is how to create that involvement in our industry."

It all starts with sharing. People used to spend hours making mix tapes to share with their friends. But having access controls on most legally downloaded music prevents copying - and also the digital equivalent of mix tapes. Now these controls are slowly disappearing, meaning that a new generation can swap playlists and music files.

This is especially important for young people. Music sharing provides a platform to keep up with the latest trends and construct a social identity. One young Iranian woman in an Ericsson focus group was so motivated to get music onto her non-music phone that she used its voice recorder to record songs from a stereo.

According to the music industry organization the International Federation of the Phonographic Industry (IFPI), soon, half of all mobile phones will be music capable, with Sony Ericsson devices at the forefront. Almost half of Sony Ericsson users with a music phone use the music function every month, compared with only 38 percent of the general music phone population, according to Global Infocom, an annual ConsumerLab survey.

But simply providing a music function is not enough. The mobile industry must trigger widespread music sharing, with 3G and broadband penetration, flat-rate access pricing and extensive libraries the keys to success, Nyblom says.

From 2005 to 2006, the digital-music market nearly doubled in size to about USD 2.1 billion, with mobile music accounting for half of that, according to IFPI. At the same time, the industry model is rapidly moving away from its pay-per-song or album norm. The band Radiohead recently offered its latest album, In Rainbows, online for whatever customers chose to pay. And a company called SpiralFrog is offering a free, advertising-based music download service in the US and the UK.

Nyblom says people are no longer willing to buy an album on faith. They want to hear a song two or three times first; they want to "own" that song. Then, if they like it, they pay for it.

Artists have figured out how to make a profit from this. Radiohead made a fair amount of money from the In Rainbows downloads but, more importantly, the idea created a buzz. The CD - now selling at normal retail prices - has topped the charts in the US and the UK.

Staying on top of these changes essentially comes down to one thing: recognizing the special power of music. "If I share a song with you, either the song is important to me, or it is something that I think you will like," Nyblom says. "It is highly communicative of who we both are."

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