Rich media, made-for-mobile content and increasing adoption of 3G data services will drive mobile entertainment revenues to $47.5bn by 2010, according to Juniper Research.
The second edition of the analyst firm's Mobile Entertainment Markets: Opportunities and Forecasts 2007-2012 report predicts that mobile music, games and TV will generate $34bn by 2010.
Although the market is expected to go from strength to strength, the report warns that entertainment service adoption will be retarded unless improvements are made to the user interface, network coverage and the excessive cost of data services.
Furthermore, some mobile areas such as gambling, adult content and some social networking services could be hindered by national and international legislation.
This could prevent any service deployment in some cases, for instance if the US extends its ban on online gambling to the mobile arena.
"Traditionally, services such as ring-tones and wallpapers accounted for the bulk of mobile entertainment services," said Dr Windsor Holden, the report's author and senior analyst at Juniper Research.
"However, usage patterns are changing rapidly with the increasing availability of more sophisticated and attractive content such as streamed and broadcast video, social networking services and multiplayer games designed specifically for the mobile environment."
Dr Holden told vnunet.com that, as adoption increases, operators and providers will have to scale their infrastructure accordingly or face serious bandwidth issues in the future.
The analyst added that particularly data-hungry services such as mobile TV will need their own dedicated networks in order to cope with demand from more than a handful of users at a time.
This problem is already being seen in markets such as the Far East where adoption is high.
China and the Far East currently provide the largest market for mobile entertainment services and contribute to around 41 per cent of global revenues.
Asia Pacific is forecast to retain its leadership through to 2012, despite rapid growth in developing markets when it will still contribute 33 per cent of global revenues.
Dr Holden added that revenue models could also change over time, with more focus on subscription and rental based models which provide a more constant revenue stream for vendors than the one-off sales seen today.
Ad-based funding could also become an increasingly significant driver in the mobile entertainment front over the coming years, but Dr Holden is wary of the current hype surrounding the model.
The analyst believes that this could be particularly effective for games and possibly for mobile TV as ads can be highly customised based on the personal data held by the mobile operators for each customer.
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