There's not a lot of good news in a new report from Juniper Research which found that the digital music industry will experience slow growth in revenue over the next 5 years, from $12.3 billion this year to just $13.9 billion in 2019. Strong performance in streaming music will largely be offset by decline in revenues from legacy services such as ringtones and ringback tones, according to the report.
Music discovery remains a challenge
The Junper report argues that music consumption is set to become a highly sociable activity, with increased integration of features including music discovery and social sharing. But finding ways to expand the pool of their subscribers and increase the ease of discovery remains a key challenge for streaming companies.
Juniper believes that smartphones and tablets will be the main platforms of growth, although digital music revenues on the PC/laptop will remain robust over the forecast period. Additionally, emerging markets are expected to strengthen in terms of digital music consumption, as disposable income levels continue to rise and streaming services expand into these regions.
Pureplay providers face challenge from OTTs
According to the new report from pureplay music providers, such as Spotify and Pandora, will increasingly find themselves competing with personalised services from the leading OTT (over-the-top) players, including Apple and Google.
However, the report cautioned that piracy was still responsible for major revenue leakage, particularly in emerging markets, such as China, where only a small percentage of content is legally acquired. Nevertheless, it pointed to instances where the industry had successfully reined in such activity, such as a Singaporean bill that allows the blocking of sites that contain infringed content.