Recession will cut mobile entertainment growth in half

Unless key markets emerge from recession, user spending on mobile entertainment services will slow dramatically, increasing by nearly $13 billion over the next five years according to a forecast issued by market analysis firm Juniper Research, which previously predicted pre-downturn growth of $26 billion. Juniper argues the decline in consumer discretionary spending will translate to reduced adoption of and churn away from subscription-based content, although the frequency of one-off games and music downloads will also fall. Juniper additionally contends slower deployment of content services means revenues are likely to be lower than previously forecast even after markets emerge from the downturn.

Juniper anticipates mobile TV will be the mobile entertainment sector most adversely affected by the economic downturn, followed by music and user-generated content. Ease of access and data pricing also continue to hamper mobile content adoption, Juniper said. "While operators have made significant strides in reducing the costs of bundled data, the overwhelming majority of mobile users are prepaid customers who want to sample mobile Internet usage before committing to a bundle," said Juniper head Dr. Windsor Holden in a prepared statement. "And in most cases, data costs are so high that they act as a disincentive to such initial usage."

For more on the Juniper forecast:
- read this release [1]

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Forecast [2]: Mobile gaming to top $6.8 billion by 2013
Forecast [3]: Mobile banking revenues to top $5.5 billion in 2013