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Streaming Music Growth How The S-Curve Will Determine Growth

Report by Mark Mulligan
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The 20,000 Foot View: Streaming music drove trade revenues of        billion in 2016, up        from        billion in 2015 while music subscribers grew from        million to        million over the same period. The rate at which the streaming music market will grow, and the level at which it will peak, is determined not just by industry strategy but also by the underlying laws of consumer adoption. Over the course of the last        years, adoption of consumer-driven technologies has adhered to the s-curve adoption pattern. Though the rate of adoption has accelerated in the digital era, the underlying principles continue to shape consumer driven markets and will determine the outlook for streaming music. In this report, we use        years’ worth of consumer adoption data to identify streaming music’s growth potential.

Key Findings: 

  • With technology adoption, humans behave in highly predictable ways defined by cohorts of personality types and their attitudes to technology
  • The net result of technology making its way through five key consumer groups is that adoption typically follows an ‘S-Curve’
  • Technology adoption is becoming faster. Radio took        years to reach ubiquitous penetration while the internet took just        years
  • Meanwhile, messaging apps are reaching market maturity within just a few years
  • Technologies can fall as quickly as they decline, with the pattern of decline a mirror image of the growth curve
  • The modern recorded music business is built upon format replacement cycles, with adoption curves adhering to the s-curve model
  • Streaming is simply the latest format replacement cycle and is set to replace downloads on a like-for-like basis, as well as mopping up some legacy CD spending
  • The peak of the pre-decline music industry was inflated by pricing inflation
  • The average revenue per music unit sold in 1991 was        by 1996 it was        Over the same period, music sales grew by        in volume terms but        in value terms
  • Based on historical s-curve adoption data and growth to date, the growth potential for the streaming music market is in the        billion range by 2025
  • Streaming has the potential to become the lion’s share of the recorded music business by 2025, but that path is not set, with pricing a key growth determinant

Companies and brands mentioned in this report: Apple, Facebook, HMV,, Napster, Panasonic, Spotify, Sony, Tower Records, Vevo, YouTube

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