The music industry is being urged to cut down on the amount of free music available for download because it is believed they are not maximising the opportunities afforded by subscription services.
Growth in paid online music downloads slowed down to just 3 percent in the US last year, and the trend is expected to spread to other countries before long, hindering the growth of music subscription services.
Ovum, an independent telecoms analyst, says subscription music services could boost revenues of the digital industry by more than 60 percent from 2011 – 2015, topping $20 billion by 2015.
Ovum analyst Mark Little said: “Digital music will experience what might appear to be healthy growth over the next five years, but there is a danger that this could mask the fact that the industry is not maximising revenue potential.
“There is too much free music available in the digital economy and not just the illegal kind. Free Internet radio such as Pandora or Grooveshark, and freemium on-demand music services such as Spotify, are offering free music without maximising advertising or premium subscription revenues for themselves or the industry.”
Ovum’s predicts that globally, revenues from music subscription services will grow rapidly, as consumers recognise the benefits of being able to access millions of streamed songs for the price of a CD every month rather than owning individual downloads.
Subscription growth will also be driven by technology giants Apple and Google, which are all expected to launch digital music subscription services this year. Sony has already ventured into the sector with its Qriocity service.