Stream Dream – Where the Digital Music Industry is heading
The music industry has gone through radical changes over the past decade. The launch of the first line of the iPod by Apple in October 2001 revolutionised how music is consumed today. The pace of innovation, the number of new technologies and businesses have been growing fast. We have seen the emergence of iTunes Store, YouTube, Amazon MP3, Google Play, and more recently streaming services such as Pandora and Spotify. Add 3G and 4G connections and Wi-Fi hotspots to the equation and you have a service that enables you to store, access and play music anytime and anywhere. The questions naturally rises – where is the industry heading next and what does this staggering growth mean for record labels and artists? In the past music had to be purchased by the consumer in some form, either on a vinyl, CD, or most recently, via download. All of these means of accessing music had one thing in common, i.e. they all included a purchase. The most recent, and increasingly popular, innovation in how people consume music is streaming, where the content is paid for via a subscription, or more often, accessed for free. People are also increasingly consuming music on-the-go and they want all of their devices to be able to provide the same music listening experience. This need gave way to new technologies and services that converge devices into a music playing system. The quality of music also remains important, which supports the emergence of new and better performing headphones, speakers and low latency technologies. Consumers are not just moving toward streaming, they are also migrating to mobile devices, mainly smartphones and tablets. Although downloads and streaming remain robust on the PC and laptop platforms, in general, smartphones and tablets are expected to gain a greater share of the market. At the same time, consumers will still want to own some of the content they listen to for a variety of reasons, mainly to have access to music when they are on-the-go but offline. Additionally, making music more accessible to the masses at lower price points can help the industry tackle its long-time enemy, i.e. piracy. Furthermore, the digitisation of music consumption enables greater geographies to get involved and changes the ways artists and fans interact. A challenge that seems to remain is how streaming service providers will increase the number of subscribers and turn a profit in the long run, as well as how that profit will be divided among service providers, music labels, and artists. Overall, as noted in our latest research, services and technology that enable digital music consumption will gear toward ensuring a more mobile, interactive, and cloud/streaming-based activity where music fans can enjoy a multi-room, multi-platform experience.