Skip to main content

Global Digital Music Market Growing to $22.5 Billion

The recorded music industry has experienced a major loss of value during the last decade, primarily due to the legacy companies choosing a slow and painful path to transition their business models and thereby embrace digital media distribution.

That being said, lately they appear to be more in sync with consumer demand. The global digital music market is expected to grow at 15 percent annually, reaching nearly $22.5 billion by 2017, according to the latest market study by Ovum.

Revenue is being boosted by streaming music subscription services, which are predicted to show a strong compound annual growth rate (CAGR) of 46 percent -- much of that upside will be due to bundling partnerships with telecom service providers.

New forecasts from Ovum reveal growth across most regions -- except North America and Europe, where mobile music is expected to decline by 5 to 7 percent (excluding unlicensed, non-music, and mobile subscriptions) as phone ring back tones fail to make up for the decline in phone ringtones.

"The decline in the growth rate of mobile music from previous forecasts is mainly due to the under-performance of ringback tones, the dominance of free ad-supported music, and data costs that are making over-the-air (OTA) mobile music less appealing to consumers,” said Mark Little, consumer telecoms analyst at Ovum.

While mobile music is struggling to maintain a growth trajectory, some consumers are recognizing the benefits of the subscription model, being able to access tens of millions of streamed songs for the price of a CD every month -- rather than owning individual song downloads.

Some forward-looking communication service providers are helping to drive subscription growth with mobile music bundles, leading to significant growth in South and Central America, for example, with over 50 percent CAGR.

In Asia Pacific, growth created by consumers migrating to subscription services -- such as Lismo Unlimited from KKBOX in Japan -- will result in a regional CAGR of 44 percent.

With Spotify in the U.S. market -- joining Rhapsody, Sony Music Unlimited, Rdio and MOG -- they're attempting to help grow on-demand subscriptions. But the American mobile network service provider data caps will handicap their efforts. Regardless, Ovum still estimates a 40 percent CAGR over the forecast period.

Ovum also expects the main driver of digital music in the forecast period to be flat-rate subscriptions, because it is a format that can be easily bundled by the service providers.

However, the recorded music industry never fully recovered from the way that they handled the transition from analogue to digital music formats. Record label brands have essentially lost most of the value that they had attained during a bygone era of their legacy.

Popular posts from this blog

Artificial Intelligence Growth at an Inflection Point

Business technology investment no longer follows a predictable path to growth. The global venture capital (VC) investment in artificial intelligence (AI) was close to its peak in 2021 reaching $22.3 billion, according to the latest worldwide market study by ABI Research. This is just $400 million shy of the historical high of $22.7 billion recorded in 2019. Compared to the $15 billion recorded in 2020, the market made a remarkable recovery, with a 48.5 percent year-on-year growth. Will the future AI marketplace return to stable growth, or will it remain volatile? Artificial Intelligence Market Development "COVID-19 greatly accelerated the speed of digital transformation within the enterprise. Businesses are looking for solutions to work processes automation, customer care, due diligence, transcription and translation, and sales and marketing enablement tools," said Lian Jye Su, research director at ABI Research . At the same time, COVID-19 led to the Great Resignation of 2021

How a Digital-First CEO Leads Transformation

Some leaders reject the notion that "wait and see" is the best response to disruptive change. Savvy senior executives are already driving digital business transformation throughout their organization in an effort to gain a bold strategic advantage. According to the latest market study by International Data Corp (IDC), Digital-First CEOs plan to drive at least half of their income from digital business products, services, and experiences by 2027 -- that's ahead of the market average of 39 percent. Driven by their response to the COVID-19 pandemic, these business leaders have changed how they think about the relationship between business and technology, and how they approach the next digital transformation era -- from scaling digital technology to guiding a viable digital business. Digital Business Market Development IDC defines digital business as value creation based on technology, which entails: 1) Automated customer-facing processes and internal operations; 2) Provision

Digital Solutions for Industrial & Manufacturing Firms

Executive leaders of fast-moving consumer goods (FMCG) are seeking guidance on how to apply new business technology in their manufacturing operations. CIOs and CTOs are tasked with gaining insight into the best solutions for digital transformation. ABI Research evaluated the impact politics, regulation, the economy, supply chain, ESG, and technology are having on FMCG, pharma, producers of steel, chemicals, pulp and paper -- as well as the mining and oil & gas sectors. Digital Transformation Market Development "Our assessment found that the FMCG sector is under pressure from all sides," says Michael Larner, industrial & manufacturing research director at ABI Research . Securing raw materials is challenging considering lockdowns in China and limited grain supplies from Ukraine. Supply shocks are raising input costs, and operating costs are rising with higher energy costs coupled with the pressure to pay higher wages and work sustainably. "We all hoped that with th