Gartner Survey Looks At The Future Of Music Online

New Survey

A new survey from GARTNER, called "Media IAS Online Music Forecast, 2011-2015: Social Media, Subscriptions and the Cloud," has been released by analysts MIKE MCGUIRE and STEPHANIE BAGHDASSARIAN. They write, "As consumers opt for connected devices -- media tablets, smartphones
and connected media players -- across world regions, their desire for access to and consumption of music and content is growing as well. Music labels, artists, publishers and new distribution intermediaries are developing new business models to address consumers' changing behavior."

Key Findings

* Online music revenue from end users will grow more than 31% by the end of the forecast period: from $5.9 billion in 2010 to $7.7 billion in 2015. By comparison, consumer spending on physical music (CDs and LPs) is expected to slide from around $15 billion in 2010 to around $10 billion in 2015.

* Online music subscription services, such as SPOTIFY, will be the main growth sector in this market, showing fivefold growth from 2010 to 2015. A la carte sales will drive the bulk of overall revenue.

* The highest growth rates will be in regions such as LATIN AMERICA and the MIDDLE EAST and AFRICA, which have not historically been strong in paying for tracks or albums from online services or stores (although perhaps stronger in paid-for ringtones from their service providers).

GARTNER concludes, "As online distribution revenue starts to overtake physical revenue -- which will happen beyond our forecast horizon of 2015 -- GARTNER believes the stakeholders in the music industry will continue to realign their businesses to maintain their places in the value chain. Consumers are likely to continue to take advantage of the applications, devices and services that provide them with multiple ways of discovering, consuming and communicating about music. Moreover, as more and more music-related transactions, such as concert ticket sales and merchandise, see most -- if not all -- of their business moving online, online music services, downloads or subscription services will have to find ways to make those related transactions available to their customers.

Read the full survey here.

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