Revenue growth in digital music dropped from 91 per cent in 2006 to 6 per cent in 2010, according to Parks Associates.
While over 50 per cent of US broadband households prefer the computer as their digital music access point, proliferation of smart mobile and connected CE and new cloud-based delivery models are expanding music services into more unique consumer devices and environments. In 2010, 34 per cent of US broadband consumers were using their mobile phone as a music player, up from 9 per cent in 2007. In response, digital music service companies such as 7Digital, Pandora, and Spotify have been proactive in forming OEM partnerships to make their services accessible through more devices.
“For years, the music industry concentrated on piracy as the biggest threat, but that focus is changing,” said Laura Allen Phillips, Research Analyst, Parks Associates. “Consumers are used to the idea of ‘free’ music, so service providers need to add something of value beyond the music itself.”