When It Comes to Mobile Audio, Ads Aren't a Bad Thing

Study Says Consumers Will Accept Messages -- in Exchange for Free Content

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SAN FRANCISCO (AdAge.com) -- Days after Steve Jobs emerged victorious, at least with one major record label, in his quest to eliminate digital-rights management, a new study appears to offer another reason the Apple CEO should be optimistic when it comes to his soon-to-be-released iPhone.
Steve Jobs
Steve Jobs Credit: AP

Arbitron and Telephia, in a study released this week, found the mobile-audio space has lots of room for growth -- and that an ad-supported model is most attractive when it comes to getting users to consume mobile content.

One in 16
Some 49% of all mobile phone users are using their mobile phones for text messages, music and other uses besides simple voice calls, but, at the moment, only one in 16 mobile-phone subscribers are using the devices for audio features. Of those, almost two-thirds have transferred either music or other audio content from another device, such as a PC or MP3 player.

The study found that most mobile-audio users are in those sought-after, hard-to-reach males aged 25 to 44, with a larger proportion of them African American, Asians and Hispanics. Surprisingly, the study found 31% listened to music on their mobile devices -- not at on the go, but at home, where the phone served as a "personal third screen entertainment platform."

That's good news for Mr. Jobs. The study shows most mobile audio users are picking up music from other devices. The new iPhone, set to launch this spring, will be tethered to the PC for picking up music as opposed to over-the-air downloads pushed by the wireless service providers such as Sprint. "[The iPhone] seems to be well-positioned," said Neal Bonner, manager-market development, Arbitron. "What's going to happen is anybody's guess."

Interested in ads
For marketers restless to get their ad messages on the third screen, the study was one of the first where consumers indicated they were interested in advertising on their mobile phones, albeit in exchange for free mobile content.

"Most current mobile-audio users agree that commercials are a fair price to pay for free content and most prefer free content with commercials to paying a small subscription fee," the report said.

That was the good news. The bad news? The study found that attracting new mobile-audio users will be challenging. Of those who are not using mobile-audio services, about two-thirds are "not interested at all" in mobile audio. Not surprisingly, "advertising, free trials or other promotions, such as referring a friend, could help stimulate usage," according to the study.

Incentives, in general, seem to be a good way to entice those with mobile phones to agree to advertising: A study from Harris Interactive found that while 90% of respondents said they were "not at all interested" in receiving ads on mobile phones, more than three-quarters said a cash incentive would get them to change their minds.
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