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Global Music Market to Hit $25 Billlion
05 Apr 2017 - Subscription streaming services will drive the global music market up by 25% between 2016 and 2021, although the overall value of the market remains significantly lower than its peak in the early 2000s, according to a new report by Futuresource Consulting.
The Global Digital Music Report calculates that consumer spend on recorded music grew 8% last year to reach $19.8 billion, and is on track to reach almost $25 billion within five years - some 25% larger than the market's total in 2016.
The momentum of streaming music subscriptions, driven by the continued success of Spotify in particular, is compensating for the annual losses in downloads and packaged music – although there are important regional variations.
"After the global music market had its strongest performance for over 12 years in 2015 in terms of year-on-year performance, 2016 proved to be another healthy year in many countries worldwide, providing a strong bedrock for continued growth," says David Sidebottom, Senior Analyst at Futuresource Consulting.
The Global Digital Music Report provides insight and analysis relating to the overall music market, but focuses on the competitive streaming music subscription landscape. With almost 130 million users at the end of 2016, Spotify continues to lead the way, but the influence of other services including Apple Music and Amazon are also addressed.
Forecast consumer spend data is broken out for packaged music; pay-per-download singles/albums and streaming music subscriptions.
These figures are complemented with detailed market data for 2013-2021 and regional overviews of the streaming music market in Japan, Korea, China, USA and Western Europe.
"Despite the impressive growth in streaming music services, it remains a challenging sector financially for both services and many artists," says Sidebottom. "For artists, the perceived low rates from free services against declining income from packaged music and downloads, means that the importance of touring and other ancillary revenue has increased. For services, differentiation is difficult and exclusives can be expensive. Deep pockets or a strong parent company are often required to significantly grow a subscriber base for most services."
A key driver of streaming music subscriptions has been the growth in wireless in-home audio – with owners of these products significantly more likely to be premium streaming music subscribers than the overall population.
"The growth in voice controlled speakers will further help drive subscription growth. Combined, they give listeners an enhanced, unlimited and seamless listening experience," adds Sidebottom. By 2020, Futuresource expects there will be 65 million voice controlled speakers and audio systems in use worldwide, as the sector evolves beyond Amazon's current Echo speaker.
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Futuresource Consulting is a specialist research and knowledge-based consulting company, providing organisations with insight into consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments.
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