Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- The issues
- Thumbs down for discovery, song selection, personalization
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- Figure 1: Attitudes to streaming music services, June 2016
- Audience opposed to monetization
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- Figure 2: Attitudes to ads, subscriptions, and buying music, June 2016
- Amazon about to take a bite out of competition
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- Figure 3: Leading internet radio services, June 2016
- The opportunities
- Migration from desktop to smartphone to lead revenue charge
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- Figure 4: Use of internet radio services on smartphones, by age, June 2016
- Massive gains in ad sales still available from terrestrial radio
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- Figure 5: Terrestrial radio ad sales vs streaming music revenues, at current prices, 2013-15
- Movement into dashboards to propel listening during commutes
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- Figure 6: Use of online music services in car, by household income, June 2016
- What it means
The Market – What You Need to Know
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- Significant growth as smartphones and car usage boost sales
- Paid subscriptions taking over
- SiriusXM subscriptions top leading internet radio subscriptions
- Amazon’s weight yet to be felt
Market Size and Forecast
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- Revenue quadruples from 2011-16
- New services add to growth
- Dashboard integration, smartphone usage to head further gains
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- Figure 7: US revenues and fan chart forecast of streaming music, at current prices, 2011-21
- Figure 8: US revenues and forecast of streaming music, at current prices, 2011-21
Market Breakdown
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- New services propel paid subscriptions to leading segment
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- Figure 9: US streaming music revenues and market share, by segment, 2013 vs 2015
- Growth slows for digital radio
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- Figure 10: US streaming music revenues, by segment, 2011-15
Market Perspective
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- Competition between traditional listening and streaming
- Younger streamers dumping traditional listening
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- Figure 11: Traditional music listening vs internet radio, by age, June 2016
- SiriusXM retains larger base than streaming services
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- Figure 12: Satellite radio sales vs internet radio subscription sales, 2013-15
- High-income groups favor satellite radio
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- Figure 13: Use of traditional listening platforms vs internet radio streams, by household income, June 2016
- Music sales still twice the size of streaming revenue
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- Figure 14: US music sales, 2011-15
Market Factors
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- Smartphone usage
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- Figure 15: Use of internet radio services on smartphones, by age, June 2016
- Sponsored data, unlimited plans a perk for streaming
- Dashboard access to propel ad sales
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- Figure 16: Use of online music services in cars, by age, June 2016
- Power users make use of mobile and auto
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- Figure 17: Use of online music services in cars and on smartphones, by number of services used, June 2016
Key Players – What You Need to Know
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- YouTube, Pandora most commonly used services
- Advertising costs to narrow field
- Amazon to cap on demand subscriptions, listening hours
What’s Working?
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- More than half of listeners use Pandora
- On demand subscriptions
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- Figure 18: Internet radio services used, June 2016
What’s Struggling?
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- Concerns at Pandora
- Subscriptions not rising as rapidly as at competing services
- Stalling listener hours, user base
- Efforts underway to resume growth
- Advertising ups ante for niche services
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- Figure 19: Internet radio services used, June 2016
What’s Next?
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- Amazon’s weight to be felt
- Consolidation continues
- Extending beyond music
- Exclusivity
- Lower pricing
The Consumer – What You Need to Know
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- Online adults as likely to stream as to listen to traditional radio
- Listening style varies with age
- Young, urban, and Hispanic groups closer to subscribing
- Young, urban, and Hispanic groups respond positively to ads
- Men, high-income groups spend on music
Methods of Listening to Music
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- Streaming closes in on traditional music listening
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- Figure 20: Methods of listening to music, June 2016
- Young, Hispanic, urban trend toward internet radio
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- Figure 21: Methods of listening to music, by Hispanic origin and area, June 2016
Usage Patterns
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- Passive usage the standard
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- Figure 22: Attitudes and behavior relating to listening style, June 2016
- Age primary determinant of listening style
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- Figure 23: Attitudes and behavior relating to listening style, by age, June 2016
- Rural users put in time
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- Figure 24: Attitudes and behavior relating to listening style, by area of residence, June 2016
Subscribing
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- One in five use a paid service
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- Figure 25: Use of paid subscriptions, June 2016
- Men, youth, Hispanics, and high-income groups sign on
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- Figure 26: Use of paid subscriptions, by select demographics, June 2016
Attitudes to Subscription
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- Listeners want music free of charge, ads
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- Figure 27: Attitudes to subscriptions, June 2016
- Young more inclined to subscribe, accept ads
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- Figure 28: Attitudes to subscriptions, by age, June 2016
- Urbanites, Hispanics more tempted by subscriptions
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- Figure 29: Attitudes to subscriptions, by Hispanic origin and area, June 2016
Response to Ads
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- Similar responses seen between internet and traditional radio
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- Figure 30: Response to ads, traditional vs internet radio, June 2016
- 18-44s respond more positively to internet radio ads
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- Figure 31: Response to internet radio ads, by age, June 2016
- Hispanics, urbanites respond more favorably to ads
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- Figure 32: Response to internet radio ads, by area, June 2016
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- Figure 33: Response to internet radio ads, by Hispanic origin, June 2016
Buying Music
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- Usual suspects also top buyers
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- Figure 34: Purchasing music heard on internet radio, by select demographics, June 2016
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – Market
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- Figure 35: Total US revenues and forecast of streaming music, at inflation-adjusted prices, 2011-21
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Appendix – Consumer
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- Figure 36: Use of subscription-only services, by area, June 2016
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- Figure 37: Use of subscription-only services, by household income, June 2016
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- Figure 38: Traditional music listening vs internet radio, by number of services used, June 2016
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- Figure 39: Purchasing music heard on internet radio, by demographics, June 2016
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