Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Subscription streaming to drive music industry growth
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- Figure 1: UK music industry income from physical, digital and streaming, 2011-21
- Vinyl disrupts physical decline
- Improved internet speeds boost reliability of streaming
- YouTube battle highlights continued controversy over artist pay
- Smart speakers create new opportunities for streaming service differentiation
- Key players
- Amazon launches Music Unlimited
- SoundCloud launches new mid-tier subscription service
- Spotify encourages premium switch through early content
- Tidal continues to prioritise music quality
- The consumer
- Over a third of internet users stream music
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- Figure 2: Use of music formats, December 2016
- YouTube is the primary way of streaming free music
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- Figure 3: Use of free streaming services, December 2016
- Spontaneous song selection is the main way people stream music
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- Figure 4: Listening habits on streaming services, December 2016
- Spotify Premium remains the most popular paid-for service
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- Figure 5: Use of paid-for streaming services, December 2016
- Price is the key factor influencing choice of paid service
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- Figure 6: Factors influencing choice of paid-for streaming service, December 2016
- Having a physical music collection is important to many
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- Figure 7: Purchasing habits for physical media, December 2016
- Many podcast listeners are willing to pay for content
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- Figure 8: Podcast listening habits, December 2016
- What we think
Issues and Insights
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- Differentiating subscription streaming services through price…
- The facts
- The implications
- …and through content
- The facts
- The implications
- How to monetise podcasts
- The facts
- The implications
The Market – What You Need to Know
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- Subscription streaming to drive music industry growth
- Vinyl disrupts physical decline
- Smart speakers create new opportunities for streaming service differentiation
- Improved internet speeds boost reliability of streaming
- YouTube battle highlights continued controversy over artist pay
Market Size and Forecast
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- Subscription streaming to drive music industry growth…
- …but it is cannibalising income from digital sales
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- Figure 9: UK music industry income from physical, digital and streaming, 2011-21
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- Figure 10: UK music industry income from physical, digital and streaming, 2011-21
- Segment forecasts
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- Figure 11: UK music industry income from physical formats, 2011-21
- Figure 12: UK music industry income from digital sales, 2011-21
- Figure 13: UK music industry income from streaming services, 2011-21
- The impact of Brexit on the music industry
- Forecast methodology
Market Segmentation
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- Subscription streaming cancels out declines in other music formats
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- Figure 14: UK music industry income, 2011-15
- Vinyl disrupts physical decline
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- Figure 15: Physical album sales, 2013-16
- Digital sales also drop
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- Figure 16: Digital album sales, 2013-16
- Audio streams increase by 67% in 2016
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- Figure 17: Volume of UK audio music streams, 2014-16
Market Drivers
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- Continued growth in mobile device ownership
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- Figure 18: Personal ownership of consumer technology products, November 2015 and September 2016
- Smart speakers create new opportunities for streaming service differentiation
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- Figure 19: Ownership and interest in smart speakers, December 2016
- Improved internet speeds boost reliability of streaming
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- Figure 20: Superfast (≥30 Mbps) fixed broadband connections, 2011-15
- YouTube battle highlights continued controversy over artist pay
Key Players – What You Need to Know
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- YouTube is the most widely used source of streamed music
- Amazon launches Music Unlimited
- Amazon pushes voice control with Alexa
- SoundCloud launches new mid-tier subscription service
- Spotify creates more varied personalised playlists
- Spotify encourages premium switch through early content
- Tidal continues to prioritise music quality
Streaming Music Services – Market Share
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- YouTube is by far the most widely used free music service…
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- Figure 21: Use of free streaming services, December 2016
- …while Spotify Premium leads the way in the paid-for market
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- Figure 22: Use of paid-for streaming services, December 2016
Launch Activity and Innovation
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- Amazon launches Music Unlimited
- Amazon pushes voice control with Alexa
- SoundCloud launches new mid-tier subscription service
- Spotify creates more varied playlist options
- The Daily Mix
- Weather-based playlists
- Potluck feature for parties
- Spotify encourages premium upgrades through early access
- Tidal continues to prioritise streaming quality
- EE partners with Apple Music
- Audible branches out into podcasts
- Streaming services create original podcasts
Brand Research
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- Brand map
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- Figure 23: Attitudes towards and usage of selected brands, February 2017
- Key brand metrics
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- Figure 24: Key metrics for selected brands, February 2017
- Brand attitudes: Apple Music and Spotify have established loyalty
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- Figure 25: Attitudes, by brand, February 2017
- Brand personality: Spotify and Amazon Music associated with “fun”
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- Figure 26: Brand personality – Macro image, February 2017
- Spotify most closely associated with being cool
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- Figure 27: Brand personality – Micro image, February 2017
- Brand analysis
- Spotify has cultivated a very positive brand impression
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- Figure 28: User profile of Spotify, February 2017
- Amazon Prime Music has low awareness
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- Figure 29: User profile of Amazon Prime Music, February 2017
- Apple Music has positive image but is viewed as less accessible
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- Figure 30: User profile of Apple Music, February 2017
- Google Play Music needs a stronger brand image
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- Figure 31: User profile of Google Play Music, February 2017
The Consumer – What You Need to Know
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- Over a third of people stream music
- Spotify Premium remains the most popular paid-for service
- Playlists have become a popular way to stream music
- Price is the key factor influencing choice
- Having a physical music collection is important to many
- Many podcast listeners are willing to pay for content
- Seven in 10 are skipping past podcast adverts
Use of Music Formats
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- Over a third of people stream music
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- Figure 32: Use of music formats, December 2016
- Physical formats hold fairly consistent appeal across age groups
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- Figure 33: Use of music formats, by age, December 2016
- Income skew suggests possibilities for tiered streaming options
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- Figure 34: Use of paid-for streaming services, by household income, December 2016
- ‘Hardcore’ music fans are purchasing physical discs
Use of Streaming Services
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- YouTube is the primary way of streaming free music
- Freemium model could be phased out in favour of tie-ups and introductory offers
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- Figure 35: Use of free streaming services, December 2016
- Spotify Premium remains the most popular paid-for service
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- Figure 36: Use of paid-for streaming services, December 2016
- Two in five use more than one paid-for service
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- Figure 37: Repertoire of paid-for streaming services, December 2016
Listening Habits on Streaming Services
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- Spontaneous song selection is the main way people stream music
- Amazon Echo and Google Home evolve song selection
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- Figure 38: Listening habits on streaming services, December 2016
- Playlists are used by many paid-for streamers
- Helping users create their own playlists
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- Figure 39: Streaming service listening habits, by use of streaming service, December 2016
Factors Influencing Choice of Paid-for Streaming Service
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- Price is the key factor influencing choice
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- Figure 40: Factors influencing choice of paid-for streaming service, December 2016
- Sound quality would influence choice of two in five subscription streamers
- One in three are influenced by exclusive music
- Spotify prioritises playlists and recommendations
- Over a fifth prioritise artist pay
Purchasing Habits for Physical Media
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- Having a physical music collection is important to many
- Vinyl subscription services create exclusivity
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- Figure 41: Purchasing habits for physical media, December 2016
- Parents of under-18s are more likely to buy physical media as gifts
Podcast Listening Habits
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- Most podcast listeners are frequent users
- Many podcast listeners are willing to pay for content
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- Figure 42: Podcast listening habits, December 2016
- Seven in 10 are skipping past podcast adverts
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecasts
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- Figure 43: UK music industry income from physical, digital and streaming, 2016-21
- Figure 44: UK music industry income from digital sales, 2016-21
- Figure 45: UK music industry income from physical formats, 2016-21
- Figure 46: UK music industry income from streaming, 2016-21
- Forecast methodology
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