Study shows global streaming market will increase by 12%
The global music streaming market is set to increase at an annual growth rate of 12.57% over the next five years, a new research study estimates.
According to the Global Music Streaming Service Market 2015-2019 report, revenues from key players including Apple, Spotify, Pandora, Rdio and SoundCloud will grow at a CAGR (Compound Annual Growth Rate) of 12.57% by 2019.
The report, spanning 76 pages long, details the global music streaming market share, size, trends, drivers, challenges and their impact for the next five years. Other streaming sites recognised included Gold Coast-launched service Guvera, the shuttered Grooveshark, JB Hi Fi and Rhapsody.
In order to revitalise their market presence, major labels including Universal, Sony and Warner have adopted corporate strategies such as partnerships, alliances, merging and acquisitions. The report listed Apple’s merging with Beats as an example of such partnership; although recent reports have emerged that the streaming service is set to drop the Beats branding, and debut as Apple Music instead. Another example included Sony’s partnership with Spotify last January, effectively replacing Sony Music Unlimited for PlayStation Music. The service is set to launch on PS3 and PS4 consoles by the end of this month.
The report also takes into consideration the revenues generated from not just Smartphones, but also laptops, PCs and tablets. According to the report, music subscriptions have increased significantly due to the merging on streaming applications with social media sites. Facebook’s collaboration with Spotify has allowed new users to share playlists with their friends, as well as help the streaming juggernaut accumulate new subscribers. This goes in tandem with Spotify’s plans to encourage free users to migrate to their premium service.
The US was revealed as the biggest shareholder of the music streaming market, accounting for over half of the market share. Europe, Middle East and Africa were also identified as key contributors to online streaming revenues. The streaming market is still developing within the Asia-Pacific, but the report predicts a steady growth over the years due to the rising popularity of mobile music streaming in the region.
Currently, Spotify remains the biggest player in the music streaming market, pulling in revenue of AU$1.41b last year despite its AU$248m loss. At the Music Biz Conference in Nashville on Tuesday, Spotify’s Director of Economics Will Page claimed that Spotify represented $1 out of every $10 record labels earned in the first quarter of 2015 and10.2%of US recorded music revenue in 2014.
Page noted that Spotify is already half of the $1.5b global subscription streaming market. With the Global Music Streaming Service Market report predicting the further growth of streaming sites, there is considerable truth in Page’s statement that streaming “is no longer an outlier in the business.”
A copy of the report has been made available to purchase here.