The global digital music market will grow at 15% per year, with revenue reaching $22.5 billion by 2017.
That’s according to global analyst firm Ovum, which attributes the predicted growth to streaming subscription services which are expected to show a strong compound annual growth rate (CAGR) of 46% thanks to service provider partnerships.
However, Ovum expects mobile music in North America and Europe to decline by 5-7%.
“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," Mark Little, Ovum’s consumer telecoms analyst, explains.
The company says, however, that Telcos are helping to drive subscription growth through mobile music bundles, especially in South and Central America.
“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 percent,” says 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 percent CAGR over the forecast period.
“We expect the main driver of digital music in the forecast period to be subscriptions, because it is a format that can be easily bundled by service providers, as well as offered directly, resulting in increased penetration of subscriptions around the world”.