Digital Music Industry Revenues Dip as Users Demand Mobile Music



Revenue growth in digital music dropped from 91 percent in 2006 to 6 percent in 2010, according to a report by Parks Associates.





The report called Digital Music Services: Trends and Outlook evaluates consumers’ growing demand for music everywhere solutions and industry’s response with new business models including enhanced discovery engines, multidevice access, music-centric social networking tools, and digital locker options like those being launched by Amazon, Apple, and Google.





While over 50 percent of U.S. 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 percent of U.S. broadband consumers were using their mobile phone as a music player, up from 9 percent 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.”





Digital Music Services: Trends and Outlook examines how key players are using digital music to generate revenues, increase product value, and promote stickiness within their subscriber bases.





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