Global Digital Music Market Expected To Grow 15% Annually

According to the
global analyst firm Ovum, the global digital
music market is expected to grow at 15% annually, reaching nearly $22.5
billion by 2017. Subscription services are said to be in large part responsible
for the growing revenues, predicted to show a compound annual growth rate
(CAGR) of 46%, stemming from bundling partnerships with
service providers.

Ovum also
expects to see high digital music growth in most regions across the globe, with exceptions being North America and Europe, where mobile music is expected
to actually decline by 5-7% (although this excludes unlicensed, non-music, and
mobile subscriptions).

“The decline in
the growth rate of mobile music from previous forecasts is mainly due to the
underperformance 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 Ovum’s consumer telecoms analyst Mark Little.

Mobile music’s
decline comes as no surprise really, especially in western countries where more
people own smartphones and utilize subscription-based music services. However,
Ovum reports that telecommunications companies are helping to drive
subscription growth with more mobile music bundles – pointing to significant
growth in South & Central America, which have each seen over a 50% compound
annual growth rate.

“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%,”
added Ovum’s Mark Little. “With Spotify landing in the US, joining Rhapsody,
Sony Music Unlimited, Rdio and MOG, such brands are helping reinvigorate
on-demand subscriptions, and we estimate a 40% CAGR over the forecast
period.”



Ovum concludes
that the main driver of digital music in the forecast period will be
subscriptions, due to it being “a format that can be easily bundled by service
providers, as well as offered directly, resulting in increased penetration of
subscriptions around the world”. 

More: Overall Recorded Music Sales Expected To Decline This Year
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