Thursday, May 26, 2011

Digital Music Industry Revenues Plummet As Consumers Demand Music Everywhere

34% of U.S. Broadband Households Access Music via Their Mobile Phone

Revenue growth in digital music dropped from 91% in 2006 to 6% in 2010, according to a new Parks Associates report. Digital Music Services: Trends and Outlook evaluates consumers' growing demand for music everywhere solutions and industry's response with new business models including enhanced discovery engines, multidevice access, music-centric social networking tools, and digital locker options like those being launched by Amazon, Apple, and Google.

While over 50% of U.S. broadband households prefer the computer as their digital music access point, proliferation of smart mobile and connected CE and new cloud-based delivery models are expanding music services into more unique consumer devices and environments. In 2010, 34% of U.S. broadband consumers were using their mobile phone as a music player, up from 9% in 2007. In response, digital music service companies such as 7Digital, Pandora, and Spotify have been proactive in forming OEM partnerships to make their services accessible through more devices.

Digital Music Desired Platform

"For years, the music industry concentrated on piracy as the biggest threat, but that focus is changing," said Parks Associates. "Consumers are used to the idea of ‘free’ music, so service providers need to add something of value beyond the music itself."

Parks Associates' new report examines how key players from transactional vendors and streaming music services to mobile operators and consumer electronics OEMs are using digital music to generate revenues, increase the value of their product lines, and promote stickiness within their subscriber bases. As of 2010, the combined user base of Pandora, Spotify, Last.fm, and Deezer topped 100 million worldwide, with Pandora alone accounting for over 71 million users.

Digital Music Services: Trends and Outlook highlights the challenges facing the industry, including the increasing popularity of ad-supported services and the ongoing threat of digital piracy, as well as the industry response to these and other challenges. The report also explores market players, evolving user consumption models, and the value of add-ons such as effective music discovery mechanisms.

Parks Associates will present new consumer research and examine business issues for the digital music and media industries at CONNECTIONS™, June 28-30, Santa Clara, in the sessions "Digital Media Distribution: Cloud Publishing and Delivery" and "The Evolution of the Personal Cloud."

For more information, visit http://www.parksassociates.com, http://www.connectionsus.com, or contact 972-490-1113, sales@parksassociates.com.

About Parks Associates: Parks Associates, a woman-owned and woman-led internationally recognized market research and consulting company, specializes in emerging technology solutions serving the consumer and small to medium business (SMB) markets. Celebrating its 35th year in 2021, Parks Associates is a partner to companies navigating the changing consumer technology landscapes through data-driven market insights, extensive consumer and industry intelligence, custom marketing services, and executive networking experiences and conferences.

The company's expertise includes home automation, control systems and security, digital media and platforms, entertainment and gaming, home networks, internet and video services, connected health and independent living solutions, mobile applications and services, support services, consumer electronics, and energy management solutions.

Each year, Parks Associates hosts industry webcasts, the CONNECTIONS™ Conference Series, Connected Health Summit, Smart Energy Summit: Engaging the Consumer, and Future of Video: OTT, Pay TV, and Digital Media. http://www.parksassociates.com

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