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Streaming Media: Music - US - October 2015

"Streaming music services have become a principle means of listening to music, now accounting for roughly one in three hours spent with music. The titans of tech, including Apple, Amazon, and Google compete in this space, yet pure-play services such as Pandora and Spotify continue to perform well, with Pandora still the most commonly used service, and Spotify having doubled its share of listeners in less than two years."
- Billy Hulkower, Senior Technology Analyst

This report discusses the following key topics:

  • Ad efficacy in decline
  • Subscriptions a tough sell
  • Awareness of features and pricing limited

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Ad efficacy in decline
              • Figure 1: Attitudes to ads on streaming music services, October 2013 vs June 2015
            • Subscriptions a tough sell
              • Figure 2: Attitudes to paid subscriptions among non-subscribers, June 2015
            • Awareness of features and pricing limited
              • Figure 3: Attitudes to subscription pricing and offline usage among non-subscribers, June 2015
            • The opportunities
              • Massive gains in ad sales still available from terrestrial radio
                • Figure 4: Terrestrial radio ad sales vs streaming music revenues, at current prices, 2013-15
              • Share of listening hours retains room for growth
                • Figure 5: Hours spent listening to music, radio vs streaming services vs personal libraries, June 2015
              • Transition from desktop to smartphone to lead revenue charge
                • Figure 6: US mobile ad sales and forecast, at current prices, 2010-20
              • Sought after demographics more likely to connect with ads
                • Figure 7: Positive response* to a streaming music ad in past month, selected demographics, June 2015
              • What it means
              • The Market – What You Need to Know

                • Young market still firing up
                  • Opportunity to capture sales from competing music expenditures
                    • Subscriptions at SiriusXM top all internet streaming subs combined
                      • Revenue split between digital radio and on demand
                        • Smartphone ownership propelling growth
                        • Market Size and Forecast

                          • Revenue quintuples 2010-15
                            • Figure 8: Total US forecast and fan-chart of streaming music service revenue, at current prices, 2010-20
                            • Figure 9: Total US revenues and forecast of from streaming music services, at current prices, 2010-20
                        • Market Perspective

                          • Music sales still a larger market than streaming services
                            • Figure 10: US music sales, 2011-14
                          • Dashboard keeps SiriusXM in driver’s seat
                            • Figure 11: Satellite radio sales vs streaming music on demand subscription sales, 2010-14
                        • Market Breakdown

                          • On demand gains steam
                            • Figure 12: Streaming music service revenue by segment, 2014
                        • Market Factors

                          • Smartphone usage tops tablet and PC
                            • Figure 13: Streaming music service usage by device, PC vs smartphone vs tablet, April 2015
                          • Smartphones headed toward universal ownership
                            • Figure 14: Personal ownership of smartphones and tablets, July 2013-April 2015
                          • Limited data remains an issue
                          • Key Players – What You Need to Know

                            • Half of listeners stream Pandora
                              • Consolidation in progress
                                • Progress in partnerships, exclusivity, extensions beyond music
                                • What’s Working?

                                  • Leaders back service with ad support
                                    • Figure 15: Top five streaming music providers by parent company, June 2015
                                • What’s Struggling?

                                  • Second-tier vies for listeners
                                      • Figure 16: Streaming music services used in past week, June 2015
                                  • What’s Next?

                                    • Partnerships
                                      • Extending beyond music
                                        • Exclusivity and live concerts
                                          • Crumbling pricing
                                            • Pandora’s One Day Pass
                                            • The Consumer – What You Need to Know

                                              • Hispanics, 18-24s, young men power users
                                                • Desktop usage encourages wider number of services
                                                  • Listening style varies with age and background
                                                    • Urbanites and minority groups closer to subscribing
                                                    • Time Spent Listening to Music

                                                      • Streaming services carry a third of time listening to music
                                                        • Figure 17: Hours spent listening to music, by distribution format, June 2015
                                                      • Youngest adults spend half of music time streaming
                                                        • Figure 18: Hours spent listening to music in past week, by age, June 2015
                                                      • Young men, Hispanics top streamers
                                                        • Young men average 35 hours per week with music
                                                          • Figure 19: Hours spent listening to music, by gender, June 2015
                                                        • Hispanics spend twice as much time as average streaming
                                                          • Figure 20: Hours spent listening to music in past week, by race and Hispanic origin, June 2015
                                                      • Number of Services Used

                                                        • Number of services used rising
                                                          • Desktop platform encourages more services used in high-income groups
                                                            • Figure 21: Number of services used, by household income, area and parental status, June 2015
                                                          • 25-44s surf more sites
                                                            • Figure 22: Number of services used, by age, June 2015
                                                          • Hispanics use more services, Blacks fewer
                                                            • Figure 23: Number of services used, by race and Hispanic origin, June 2015
                                                        • Listening Style

                                                          • Most users listen passively
                                                            • Multicultural groups show a more active listening style
                                                              • Figure 24: Music listening styles, by race and Hispanic origin, June 2015
                                                            • Urbanites also more active in music selection process
                                                              • Figure 25: Music listening styles, by location of residence, June 2015
                                                            • Bringing all ages into the fold
                                                              • Figure 26: Music listening styles, by age, June 2015
                                                          • Attitudes to Subscribing

                                                            • $10 price out of park
                                                              • Distinctions by demographic groups marginal
                                                                • Figure 27: Perception of $10/month subscription price, by household income, June 2015
                                                              • Men somewhat more tolerant of $10 price
                                                                • Figure 28: Perception of $10/month subscription price, selected demographics, June 2015
                                                              • Listeners interested in subscribing at lower price points
                                                                • DJs largely unnecessary
                                                                  • Figure 29: Attitudes towards subscription, June 2015
                                                                • Younger ages more open to subscribing
                                                                  • Figure 30: Attitudes towards subscription, by age, June 2015
                                                                • Non-Whites more interested in DJs
                                                                  • Figure 31: Attitudes towards subscription, by race, June 2015
                                                              • Attitudes to Ads

                                                                • Tailoring ads to meet interests
                                                                  • Half of listeners exhibit recall or positive interest
                                                                    • Some listeners irked
                                                                        • Figure 32: Response to ads on streaming services, June 2015
                                                                      • Men, parents, Hispanics, more likely to exhibit positive response
                                                                        • More time listening among men results in greater likelihood of a response
                                                                          • Figure 33: Positive response* to ads on streaming services, by gender, June 2015
                                                                        • Streaming attractive medium for selling to parents
                                                                          • Figure 34: Positive response* to ads on streaming services, by parental status, June 2015
                                                                        • Hispanics a top audience for ads
                                                                          • Figure 35: Positive response* to ads on streaming services, by race and Hispanic origin, June 2015
                                                                      • Appendix – Data Sources and Abbreviations

                                                                        • Data sources
                                                                          • Sales data
                                                                            • Fan chart forecast
                                                                              • Consumer survey data
                                                                                • Consumer qualitative research
                                                                                  • Abbreviations and terms
                                                                                    • Abbreviations
                                                                                      • Terms
                                                                                      • Appendix – Market

                                                                                          • Figure 36: Total US sales and forecast of market, at inflation-adjusted prices, 2010-20
                                                                                      • Appendix – Consumer

                                                                                          • Figure 37: Services used in past week, June 2015

                                                                                      Companies Covered

                                                                                      To learn more about the companies covered in this report please contact us.

                                                                                      Streaming Media: Music - US - October 2015

                                                                                      £3,277.28 (Excl.Tax)