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Huge Disruptive Shift in Digital Music Industry Revenue Model

Access to new music, anytime, anywhere is boosting the popularity of streaming entertainment services and driving overall growth in the global music on demand market, according to TechNavio.

The music subscription services market is growing at a CAGR of 20.64 percent from 2013-2018.

via TechNavio

Entertainment & Media Spending will Reach $2.3 Trillion by 2018

PwC forecasts that global Entertainment & Media spending is expected to rise from $1.8 trillion in 2013 to $2.3 trillion by 2018, growing at a compound annual growth rate (CAGR) of 5 percent. The U.S. remains the largest E&M market, growing at a 4.8 percent CAGR and reaching $724 billion by 2018, from $573 billion in 2013.

Globally, digital E&M spending will grow at a 12.2 percent CAGR between 2013 and 2018 and account for 65 percent of global entertainment and media spending growth by 2018.

via PwC

How Streaming Music Services Become Profitable Businesses

Pandora has a happy and loyal base of 75 million active online users, 80% of whom access the service from their mobile phone.  According to Generator Research, Pandora only needs 3 million users signed up to their mobile service (5% of its user base) to bring in more than $500 million annually, which is twice the company’s current revenues.

With $440 million in the bank and positive market sentiment in its favor, this is a time for Pandora to be bold in finding a way out of the red and into the black.

via Generator Research

The Broadcast Radio Industry Can’t Stop their Ongoing Decline

Forty-four percent of online radio listeners say their online listening comes mostly at the expense of their FM/AM listening. Seventy-five percent of people age 12 to 24 listen to online radio monthly, and almost two-thirds of them listen weekly.

Pandora has more than three times the audience of all radio stations owned by Clear Channel, CBS, Cumulus, Entercom and the next six broadcasting companies combined.

via Re/code

First SXSW Music Hackathon Championship for Developers

Introducing the first annual SXSW Music Hackathon Championship — presented by AT&T U-verse with GigaPower — where world-class hackers and designers will have 24 hours to create new tech innovations in the music space for artists, industry, and fans.

The SXSW Music Hackathon is FREE and open to the public (with approved RSVP), and will take place over a 24-hour period.

via SXSW 2014

Global Market Outlook for Digital Music Subscription Services

From 2013 to 2017 the total revenue for all record companies will increase from $16,749 million to $17,286 million, or by just 3.2%. Revenues from physical formats will fall by $2,090 million and digital download sales will fall by $663 million.

Music subscription revenues will increase by $2,969 million – by far the largest growth segment that will drive the music industry’s growth for the next 5 years.

via Generator Research

Online Digital Radio Listeners will Reach 183.4 Million by 2018

The digital radio space is undergoing expansive growth in usage, revenues and access modes. Radio listeners are tuning in to digital stations on an increasingly broad set of devices, including desktop and laptop computers, smartphones, tablets and in-car systems.

eMarketer estimates there will be 159.8 million digital radio listeners in 2014, and that figure will grow to 183.4 million in 2018.

via eMarketer

U.S. Mobile Digital Music App Adoption is Trending Upward

Smartphones may be the device of choice for mobile music listening, but research has revealed that U.S. internet users were far more likely to purchase music on a computer than on a mobile device — at 50.0% vs. 27.3%.

Music streaming services have been in the limelight, and new study findings confirmed their popularity on mobile devices — nearly six in 10 respondents had at least one mobile app that streamed music.

via eMarketer

Digital Music Services Seek a More Viable Business Model

Consider Pandora’s quarterly results from 1Q10 to 3Q13, as an example of music streaming sector performance — most of the major indicators are approaching saturation.

Active users (leveling off at around 70 million). Total listening hours (flat at around 4 billion per quarter). Average listening hours per active user (stuck at around 3.5 hours per week). Percentage of total listening time that is mobile (maxed out at around 80%).

via Generator Research

How Digital Music Subscription Services will Grow by $2.9 Billion

From 2013 to 2017, the total revenue earned by all music record companies worldwide will increase from $16.7 billion to $17.2 Billion — that’s up by just 3.2%. Revenues from physical formats will fall by $2.09 billion and revenues from digital download sales will fall by $663 million.

Revenues generated from publishing rights will increase, but only by $322 million. But global digital music subscription revenues will increase by $2.9 billion.

via Generator Research

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