Ad-based music streaming is set to exceed $1 billion by 2017, up from $782 million this year, despite the declining numbers of players offering ‘freemium’ services, according to new data from Juniper Research. The research company also noted that the download market experienced its first decline in 2014, giving way to music streaming as the biggest medium for enjoying music.
Juniper Research's Digital Music – Subscriptions, Ad Revenues & Download Services found that while freemium streaming services will continue to entice a growing number of users, the model will enjoy a greater influence in funnelling consumers towards the more profitable subscription options. The market research firm also said that many key players are opting to exclude full-featured freemium services, with offerings restricted to, at most, basic radio style features, as exemplified by Apple Music and Amazon Prime Music. Nonetheless, ad-based revenues are still expected to see strong growth as consumers continue to migrate to streaming services from other options such as paid downloads.
Hence, with the drive of ad-based services coupled with the growing impact of key players, streaming is expected to experience strong growth in user numbers, said Juniper, with Apple Music alone having attracted 11 million trial subscribers todate.
Joe Crabtree, Research author
With convenience, accessibility and curation having become the defining elements of the music landscape, the potential of the streaming industry will revolve around the levels of which providers can convert free customers to paying customers.
