Sales of music on the Internet and mobile phones reached $1.1 billion last year, triple 2004's revenues. The progress is great, but I question the future growth with rights restrictions.
Another big success story was sales of mobile-phone ring tones, which now account for around 40 percent of record companies' digital revenues, Kennedy said.
"In the cellular or mobile world, there is a culture of payment" that didn't exist in the early days of the Internet, said Adam Klein, EMI Group PLC's executive vice president for strategy. That "culture of payment" is really just corporate imposition of end-user feature restrictions.
Kennedy warned that a lack of "interoperability" of different portable music devices and download systems was hampering future growth in the digital music market. Industry leader Apple Computer Inc. (AAPL)'s iPod portable player and iTunes download system use different technology than other devices.
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