Spotify at 10 million paying subscribers

Commentary by David Sidebottom, Future Source

Consumer spend on global music subscription services such as Spotify and Deezer was estimated to be just under $2 billion in 2013
There is still significant potential for the market to grow:

Music subscriptions accounted for just 10% of the total music market spend last year, equivalent to around 25% of the digital music market

This is expected to exceed $5 billion in 2017, equivalent to 30% of global music market spend

In comparison, spend on online video subscription services such as Netflix last year was almost $5 billion

In Sweden, music streaming accounted for around 70% of total market spend in 2013, up from around 20% in 2010

Many consumers are moving away from ownership towards an access model, for both music and video

Total “pay per download” e.g. track and album downloads from services such as iTunes, declined in the USA last year, significantly down in Sweden and stabilizing in the UK.

Some consumers are changing their behaviour and this is impacting ownership, although most music buyers are still in the transition somewhere between buying CDs, buying digital tracks and albums – with the final step paying for a streaming subscription service such as Spotify

Paid-for streaming subscriptions are increasingly driven by in-home wireless audio products, such as wireless speakers (e.g. Sonos) and integrated Hi-Fi with airplay, Bluetooth and the like

Global shipments of wireless home audio products grew by over 100% in 2013 to reach 27 million units.

Futuresource’s latest Living With Digital consumer research indicates that owners of such devices are 2.5 times more likely to pay for a digital music subscription compared to the overall population