Juniper Research has found that while Apple’s entry into the music streaming market is expected to drive the expansion of subscription-based streaming services, ad-based streaming is set to record growth over the next few years.Despite a decline in the number of “freemium” music streaming providers, Juniper has found that revenue generated by ad-based services will rise from US$782 million this year to over $US1 billion in 2017 as customers continue to migrate to streaming services.
Freemium services will continue to attract users, with the model acting as an influence in funnelling users to paid services.
“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,” Juniper stated.
Apple Music has attracted 11 million trial members since its launch, with Apple offering users a three-month free membership. It now remains to be seen how many users will stick around to become paying members following expiration of the trial period.
Juniper additionally found that the music download market experienced its first decline in 2014, with the market forecast to continue its decline as the music industry focuses on the potential of streaming, while subscription streaming revenues will overtake download revenues in 2018.
“With convenience, accessibility and curation having become the defining elements of the music landscape, the potential of the streaming industry will revolve around the levels of which providers can convert free customers to paying customers,” research author Joe Crabtree commented.
