BARCELONA: The global digital music market will be worth $9bn in 2014, driven by solid growth in emerging markets and the increased adoption of smartphones worldwide, new research has forecast.
The report – a joint study from Mahindra Comviva
, the Indian mobile services provider, and Ovum Consulting, the London-based ICT consultancy – covered nine markets and said India, Africa, Latin America and South East Asia should record significant growth.
Asia-Pacific emerging markets are expected to approach $450m and Latin America to top $200m in trade value in 2014 while digital sales in the Middle East, India and Africa are also growing at nearly 20% CAGR (compound annual growth rate).
Growth in Asia-Pacific is being driven by ad-supported and subscription revenues of about 50%+ growth from a small base, the report said, while online revenues are growing at 27% in Latin America.
Even though digital growth has declined in Japan and South Korea, the report found the emerging markets of both Asia-Pacific and Latin America are growing solidly with 15% and 25% CAGR respectively.
Growth in digital music sales for emerging markets, higher service adoption rates, and better penetration of new local and international music brands are evidence that digital music is breaking into the mainstream, the report stated.
"The music industry is witnessing dynamic changes and consumption patterns are shifting, driven by the increasing adoption of smartphones," said Atul Madan, head of digital services at Mahindra Comviva.
"[This] reiterates our belief that the future of digital music will be based on enhanced engagement, 360 degree music experience and addressing the needs of price sensitive markets. Localised and customised content will play a greater role in enticing consumers," he added.
Timed to coincide with the Mobile World Congress in Barcelona, the report also noted that the digital music market is diversifying across connected devices, service types and new music brands.
It advised operators to offer personalised music packages for two main groups of consumers identified as "lean-back" and "lean-forward" listeners.
Lean-back listeners – described as casual music listeners with mainstream musical tastes and a passive listening habit – have been underserved up until now, the report advised, and so they could be a new opportunity for digital music brands.
Data sourced from Mahindra Comviva, Ovum Consulting; additional content by Warc staff