Mobile Entertainment Pushes Past $9 Billion Annually
by Laurie Sullivan, January 13, 2015
Mobile entertainment generated $9.14 billion in revenue in 2014, close to the $10 billion spent at the U.S. movie box office in ticket sales, per a study released Tuesday. The combined revenue from mobile games, video, music and location-based services (LBS) grew at a 50% compounded annual growth rate since 2011, up from $2.71 billion in 2011.
Equity research firm SNL Kagan estimates mobile video generated the second-most revenue in the entertainment category last year. Most mobile video revenue comes from advertising revenue growth and mobile views at sites like Google’s YouTube.
The firm estimates mobile video generated $1.8 billion in revenue in the U.S. last year, primarily from advertising.
The games category continues to dominate mobile entertainment, with growth from $1.47 billion in 2011 to more than $5 billion in 2014. Last year, 57% of all mobile entertainment revenue was from game sales, followed by video at 20%, music at 19%, and LBS at 4%.
Mobile music, the third-largest mobile entertainment sector, continues to grow based on subscription streaming and radio services. The U.S. ringtone/ringback business topped nearly $1 billion in its 2008 during its heyday before shrinking to an estimated less than a $50 million per year business.
Pandora, Apple, Spotify and others now command the music market, per the report. SNL Kagan estimates mobile music, including ringtones, radio and streaming services, last year generated about $1.76 billion in the U.S.
The App Store reached nearly $10 billion in sales in Apple’s fiscal year 2013, but analysts think revenue can grow to nearly $20 billion by fiscal year 2015, and about $50 billion by 2020, estimates Ben Schachter, analyst at Macquaries Securities, in a research note. “Because of the much higher growth rate for App Store revenues and continued pressure on the content sales businesses, we expect net App Store revenues to pass gross iTunes revenues in dollar terms (both as-reported) in the second half of FY’15,” he wrote.
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