Cloud Music Services Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Market Overview

The global Cloud Music Services Market has 475.48 million subscribers in 2020, and it is expected to reach 1360.29 million subscribers by 2026, registering a CAGR of 19.1%, during the forecast period of (2021-2026).

• Cloud has revolutionized the music industry and the way digital music is being consumed. Owing to its growing penetration and coverage, the mobile phone has mostly become the device of choice for enabling cloud-based music services. According to the IFPI Global Music Report 2018, the total streaming revenues grew by 41.1% and it became the single largest revenue source. In 2017, there were 176 million users of paid subscription accounts globally, with 64 million having been added during the year.
• In 2017, revenue generated from paid streaming also increased, reaching USD 1.49 billion as compared to USD 995 million in 2016. The consistent growth of services, such as Apple Music, Spotify, and Amazon's streaming services are positively impacting the growth of paid subscriptions.
• In 2018, YouTube launched a new music streaming service called YouTube Music. The new mobile app and desktop player from the company will compete with Spotify and iTunes to offer official songs, albums, playlists, and artist radio stations. While the service is free, there also exists a paid membership, which cost USD 9.99 for a month. It will make the experience ad-free and let users download music and listen to it in an offline mode
• Companies are also entering into strategic mergers and acquisitions to gain a competitive edge. For instance, in 2018, Apple acquired Shazam, one of the most popular music apps, used by hundreds of millions of people worldwide. The company also announced that the app will become ad-free for all users, even for those on Android

Scope of the Report

Cloud music services are primarily used to increase access to music by overcoming limitations imposed by the device storing capacity or lack of ownership. Streaming, subscription, and other cloud services provide listeners with service agreements to rent music out for a certain fee or under certain conditions. The increasing integration of analytics in the music industry is expected to be one of the key trends that are gaining traction in the cloud music services market. The backing from curators, editors, and data analytics systems enables record companies to provide customers with a customized music experience.

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Key Market Trends

Increasing Penetration of Smartphones and Tablets drives the Market for Cloud Music Services

In 2016, the number of smartphones sold to consumers was around 1.5 billion units, which was a significant increase from the 680 million units sold in 2012. Thus, over 28% of the global population owned a smart device in 2016, a figure that is expected to increase to 37% by 2020. With the growing number of smartphones and tablets, the music listener’s behavior is changing. 

Companies are entering into strategic partnerships with mobile manufacturers to expand their business. For instance, Spotify collaborated with Samsung to make its app the smartphone maker's official music service provider across devices, allowing two companies to create a seamless music listening experience for the user

The high percentage of mobile devices used in China (67% versus 48% in the United States),  high smartphone penetration with around 92 cellular subscriptions (per 100 people versus 117 in the United States), significant mobile coverage, and aggressive government funding to upgrade and expand mobile broadband, claiming over one billion 4G subscriptions are some of the major factors influencing the cloud music services market.

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