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OTT to help push digital music sales to $14bn by 2019

A new report from Juniper Research found that the digital music industry will experience slow growth in revenue over the next 5 years, from $12.3bn this year to $13.9bn in 2019. The research found that a strong performance in the robust streamed music sector, will largely be offset by decline in revenues from legacy services such as ringtones and ringback tones.

According to the new report – Digital Music: Streaming, Download & Legacy Services 2014–2019 – the market will be characterised by consumer migration to cloud based services. It observed that offerings 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.

The report argues that music consumption is set to become a highly sociable activity, with features such as music discovery and social media integration that connects music fans. However, 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.

The whitepaper, ‘Digital Services Face the Music’, is available to download from the Juniper website together with further details of the full report and Interactive Forecast Excel (IFxl).

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