Despite Shifts in Freemium Model, Ad-Based Music Streaming to Grow

Juniper: “The potential of the streaming industry will revolve around the levels of which providers can convert free customers to paying customers”
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The music download market is now in decline, while ad-based music streaming will continue to grow, even with fewer �freemium� services available. So says Juniper Research.

�Revenue generated through ad-based music streaming is set to exceed $1 billion by 2017, up from $782 million in 2015 �,� the UK-based company wrote in a summary of its latest report on digital music. �Many key players are opting to exclude full-featured freemium services, with offerings restricted to, at most, basic radio style features, as exemplified by Apple Music and Amazon Prime Music.� Still, it said, ad-based revenues are expected to see �strong growth� as consumers migrate to streaming.

It said that although freemium services will continue to draw more people, �the model will enjoy a greater influence in funneling consumers towards the more profitable subscription options. Hence, with the drive of ad-based services coupled with the growing impact of key players, streaming is expected to be brought to the forefront of the market with a significant global growth in user numbers.�

It said Apple Music, with its 11 million trial subscribers, will act as a �major catalyst� in driving expansion of subscription streaming.

Meanwhile, subscription streaming revenues will overtake download revenues in 2018, Juniper predicts; the digital music industry will �continue consistent growth despite the declining download market�; and new investment in music discovery is �rapidly gaining importance in provider differentiation and equally gaining traction in promoting the appeal of digital music.�