Dial M for music - labels bank on mobile downloads

Record labels are predicting that this month's launch of three new mobile phone music services will usher a return of rising sales after years of decline.

Apple's music-playing iPhone grabbed the headlines with its arrival in Britain last week. But music executives are just as excited about the new unlimited downloads service launched on Vodafone. And Nokia, the world's largest maker of mobile phones, has opened a digital music store here.

Some industry insiders are predicting a revolution that will see mobile downloading approaching that of highly developed markets such as Japan.

The world's biggest music company, Universal, is backing the MusicStation, the Vodafone service. Rob Wells, head of digital at Universal's international division said, "We are at a turning point in the UK," he says, predicting digital music sales here could offset falling CD sales within a year.

Global sales have been falling since 2000, down another 5% to £9.4bn last year. Although digital sales are rising fast, at a tenth of the total market, they have yet to make up for tumbling CD sales.

One place where the gap has been closed is Japan. Total music sales there edged up 1% last year. Japan's success in offsetting falling CD sales.

There are already indications that mobile music sales are picking up in the UK. The Orange UK network says its music sales jumped 70% over the past six months and it expects them to double by the end of 2007.

They expect the UK mobile music market to almost double from a predicted $83m this year to $156m in 2011.

4 out of 10 UK mobiles can now play music.

There are hopes handsets will improve further from a music-playing perspective thanks to the iPhone. Apple's handset is not seen by the record labels as a big driver of revenues but it has been credited with raising the bar for phone manufacturers.

Although prices have fallen, payment is simpler and handsets easier to use.

"Can something like this save the music industry? Well, NO. Because firstly it's only on Vodafone at the moment and secondly it's very cheap.

"There is a potential market there but I think it does get overestimated ," he says.

"It's relatively easy to buy music on your PC and although sales have grown it still hasn't compensated for the physical decline."

Questions

How many music services are being launched this month?

What year did Global CD sales begin to fall from?

Are predictions saying Digital Sales will overtake CD sales?

Which country has already been successful in bridging the gap from falling CD sales?