Digital music market to grow by $9 billion worldwide 2014 driven by emerging markets
In 2014 the digital music market is expected to top $9 billion worldwide at retail according to a new study. Strong growth is being driven by the expansion of international and regional music brands as well as active smartphone growth in South East Asia, India and Africa, all topping a 20% compound annual growth rate.
Digital music is demonstrating solid growth in emerging markets in particular, driven by steep growth in smartphone penetration, the expansion of both local and international digital music services, and the choice of free, 'freemium' and paid services.
The study from research firm, Ovum on behalf of provider of mobility solutions, Mahindra Comviva, predicts that Asia-Pacific emerging markets are expected to approach $450 million and Latin America to top $200 million in trade value in 2014. In emerging Asia-Pacific markets growth is being driven by ad-supported and subscription revenues showing around 50%-plus growth from a small base. In Latin America growth is driven by ad-supported revenues showing 50%-plus growth also from a small base as well as by online revenues growing at 27% supported by internet penetration that approaches 45%, 15 percentage points higher than in Asia-Pacific.
Digital sales in Middle East and Africa are also growing at nearly 20% CAGR with impressive figures for smartphone and mobile payments in Africa in particular, growing at over 40% and 70% respectively, laying solid foundations for the future growth of digital music.
However, now digital music has broken into the mainstream all over the globe, providers will need to look harder at how product is digitised and targeted at consumers, if the rate of adoption and usage is to continue, claimed Ovum.
Across the nine both emerging and developed markets surveyed, the share of devices used for listening, purchasing or downloading music changed dramatically by 2013, as compared to 2010. Computer share has dropped by a significant 14%, while mobiles and tablets together are up 15% points, emphasising the importance of mobile for reaching listeners.
'Lean-back listeners' with mainstream musical tastes and passive listening habits will need to be spoon-fed with compelling easy-to-eat digital music packages or 'magazines' free or at affordable price points to continue digital music's growth trajectory, stated Ovum.
Ovum added that the mobile operator is in a prime position to drive and benefit from this growth, having a music audience largely made up of lean-back listeners and having access to a rich and flexible choice of business models with which to monetise them.
Commenting on Ovum's Digital Music Market study, Atul Madan, head of digital services at Mahindra Comviva, said: 'The music industry is witnessing dynamic changes and consumption patterns are shifting, driven by the increasing adoption of smartphones. The study reiterates our belief that the future of digital music will be based on enhanced engagement, 360 degree music experience and addressing the needs of price sensitive markets. Localised and customised content will play a greater role in enticing consumers.'
