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.
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.