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App Annie Report Reveals Importance Of Mobile Apps For Digital Music Revenue

Worldwide-music-app-spendToday app store analytics service App Annie and global market research firm IHS released the "Digital Content Report 2013." The report documents growing digital content revenue and reveals that mobile apps are now driving growth in the global digital content market with games leading the way. Music apps saw consumer spend rise a dramatic 77% from 2012 to 2013 but much of the related sales action occurred via other channels to avoid hefty app store fees. Streaming music and discovery apps led downloads while paid apps included more content creation tools.

The "Digital Content Report 2013" is available as a free download and covers such topics as yearly digital content spend and differences in app downloads and content purchases by country. App data is based on iOS and Google Play's app stores.

Overall:

"Worldwide consumer spend on digital movies, games, and apps grew 30% from 2012 to 2013"

"Mobile apps were a critical part of that growth, with overall app spend jumping 2.3x year-over-year"

Though games were the overall leader, music app spend rose 77% from 2012 to 2013 (click on above thumbnail). Pandora Radio topped the list for consumer spend while Shazam's free app led for downloads.

Top-music-apps-2013

The growth in consumer spend on digital music driven by apps is not fully relfected in this data due to many top apps avoiding app store billing. Given the 30% cut taken by store owners, music apps often function as a delivery channel for services purchased elsewhere most notably in the case of such streaming music services as Spotify.

Keep in mind that music id apps like Shazam generate digital music sales that don't seem to be accounted for by app spend. Ad revenue is also not accounted for in this report.

So to get a complete picture of music revenue associated with mobile apps one would have to look at a broader range of data.

Mobile Apps Clearly A Key Element In Future Digital Music Revenue

Nevertheless the report supports the stance that the music industry needs to focus much more on apps as they may be cannibalizing music download sales.

It should also be noted that increased sales of game and movie-related apps should increase music licensing revenues and related opportunities given that both industries license music as a matter of course though mobile games likely use fewer actual recorded tracks than desktop and gaming console games.

An additional point of interest is the strong presence of music apps for content creation and participation, such as GarageBand, Ultimate Guitar Tabs and Sing! Karaoke. People want to be part of the action.

One app that appeared on both top 10 lists is the Free Music Download - Mp3 Downloader by ASPS Apps. I'm unclear on the status of these downloads though it's presented as a tool for downloading "free legal music, videos and audio books."

Overall this data supports the emerging consensus that focusing on monetizing mobile apps, whether through app stores or elsewhere, is key for growing digital music revenue.

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Hypebot Senior Contributor Clyde Smith (Twitter/Facebook) is currently relaunching All World Dance. To suggest topics about music tech, DIY music biz or music marketing for Hypebot, contact: clyde(at)fluxresearch(dot)com.

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