Global Cloud Music Services Market - Segmented by Service Type (Download, Subscription, Ad Based Streaming), Platform (Smartphones, Laptops, Tablets, Car, Cloud Enabled Stereosystem), and Region - Growth, Trends, and Forecast (2018 - 2023)
The Global Cloud Music Services market is expected to register a CAGR of 10.56%, during the forecast period (2018-2023). The scope of the report is limited to Type of services offered by major players, which involves Download, Subscription, Ad Based Streaming. While the platforms considered in the scope of the report include Smartphones, Laptops, Tablets, Car, and Cloud Enabled Stereosystem.
Cloud music services are primarily used to increase the access to music by overcoming limitations imposed by the device storing capacity or lack of ownership. Streaming, subscription, and other cloud services provide listeners service agreements to rent music out for a certain fee or under certain conditions. The increasing integration of analytics in the music industry is expected to be one of the key trends that are gaining traction in the cloud music services market. The backing from curators, editors, and data analytics systems, enables record companies to provide customers a customized music experience. Data analytics systems in the music industry enable streaming service providers to identify the music preferences of the customers. This enables the service providers to make intelligent/smart music recommendations for their customer, which increases the number of hours a user spends listening to music.
Increasing Penetration of Smartphones and Tablets Drives the Market for Cloud Music Services Market
In 2016, the number of smartphones sold to consumers was around 1.5 billion units, which was a significant increase from the 680 million units sold in 2012. Thus, over 28% of the global population owned a smart device in 2016, a figure that is expected to increase to 37% by 2020. With the growing number of smart phones and tablets, the music listener’s behavior is changing. Smartphones provide listener more portability and users can listen to any music, anytime, and anywhere. This is expected to drive the demand for cloud music, owing to unlimited storage, accessibility, connectivity, and affordability. As smartphones have more scope for data connectivity, as compared laptops (laptops can be connected only through wired network or Wi-Fi), they support better accessibility to need for on-demand cloud music services.
AD Based Streaming Service Type has Been Growing as a Service Type
Advertisement-based music streaming generated about USD 782 million in 2015, and the figure is expected to increase to around USD 1 billion by the end of 2017. The increase is attributed to an accelerating shift in consumer behavior, with listeners increasingly choosing streaming over downloading, as well as a number of new players entering into the world of music streaming. Ad-based streaming services are expected to receive backing from music firms as well, as the services have helped the music industry battle piracy. Apps, like Spotify and Apple Music, almost swiped out Napster and LimeWire from the market through complete convenience. Customers just have to listen a couple of ads and they can get most of the songs at a faster rate and in better quality. In 2015, Spotify’s advertising revenue grew by 380% in the first quarter, compared to the same period last year. The increase in the revenue was augmented by the growing numbers of users toward the end of last year, which brought its user base to around 60 million, 45 million of whom were on the ‘freemium’ service, which includes ads.
Asia Pacific has High Growth Potential Owing to the High Potential for Growth
In APAC, more than 50% of digital music revenue is generated from music streaming. This growth has been reinforced by the advent of a generation of digital connectivity and more localized and personalized curation. Moreover, connectivity, a prerequisite for digital music consumption, in general and cloud music services in particular, has improved significantly. This is a result of the mobile network operators’ big investment in infrastructure (about USD 600 billion), which is expected to facilitate the provision of about 90% 3G coverage and about 70% 4G-network coverage for the Asian consumers by 2020. About 50% of the revenue from Asian music streaming in 2015 was generated from the population group under 35 years old. Nearly half the media consumption by the millennial population is digital. Thus, the presence of huge youth population provides an opportunity for the region’s cloud music service provider.
Key Developments in the Market