SNL Kagan: Mobile Entertainment Revenue Tops $9 Billion In 2014
January 14, 2015 at 4:28 AM (PT)
Americans are now spending almost as much on smartphone and tablet entertainment as at the box office. In 2014, SNL KAGAN estimates mobile entertainment generated $9.14 billion in revenue, fast approaching the roughly $10 billion per year the U.S. box office generates from ticket sales. The combined revenue from mobile games, video, music and location-based services (LBS) has grown at a 50% CAGR since 2011, up from $2.71 billion in 2011.
Games remain the top revenue generator, with mobile video the second largest. SNL KAGAN found most mobile video revenue is derived not from the carrier-based mobile video subscription services, which have flatlined, but from strong advertising revenue growth and mobile views at sites like GOOGLE's YOUTUBE. In 2014, SNL KAGAN estimates mobile video generated $1.8 billion in revenue in the U.S., primarily from advertising.
Mobile music, the third-largest mobile entertainment sector, is also mid-transition: Ringtones are fading while a crescendo is building for subscription streaming and radio services. The U.S. ringtone/ringback business topped nearly $1 billion in its 2008 heyday before shrinking to what we estimate is now less than a $50 million per year business.
Replacing unfashionable ringtones are subscription-on-demand streaming services from players such as SPOTIFY and online radio services such as PANDORA, with both companies reporting that the majority of their usage is on mobile devices. In 2014, SNL KAGAN estimates mobile music -- including ringtones, radio and streaming services -- generated about $1.76 billion in the U.S.