Streaming Music is Failing to Meet Industry Needs says Strategy Analytics

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"Technology is evolving and changing the way consumers discover, listen to, share, and interact with music, but it is also a significant factor in the decline of music industry revenues. Many artists feel they are under compensated by streaming services, but as currently structured the underlying economics won't support higher royalty payments by these service, particularly for free ad-supported services" noted Leika Kawasaki, Digital Media Strategies (DMS) Analyst and author of this report. "As a result, we may never see the same levels of spending on music as we did a decade ago".

Key findings from the report include:

Strategy Analytics predicts that overall global recorded music revenue declined 1%, from $22.8 billion in 2013 to $22.5 billion in 2014, as digital music growth failed to offset losses in packaged music revenues. Streaming music (subscription and ad-supported) accounted for about half of digital music revenue in 2014, up 14% year-over-year.

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"The industry must increase music streaming services ad revenue while simultaneously transitioning users to paid services" comments Kawasaki. "With too many competitors already in the space, music-centric companies are facing growing competition from tech giants that have a distinct advantage in terms of leveraging their vast product ecosystems to drive growth in the music space. Current music-centric services may not be able to overcome inefficiencies in music streaming economics and increased competition. As a result, we very well may soon be seeing changes in the balance of power."

About Strategy Analytics

Strategy Analytics, Inc. provides the competitive edge with advisory services, consulting and actionable market intelligence for emerging technology, mobile and wireless, digital consumer and automotive electronics companies. With offices in North America, Europe and Asia, Strategy Analytics delivers insights for enterprise success. www.StrategyAnalytics.com 

US Contact: Leika Kawasaki, +1-617-614-0738, [email protected]