Music online music streaming

Russian market

Main article: Music streaming in Russia

Global market

2024: The volume of the global music applications market grew by 5% over the year, to $27.2 billion

In 2024, the global music application market reached $27.2 billion. Growth compared to the previous year, when the figure was $25.9 billion, was recorded at 5%. Industry trends are addressed in the Market Research Future survey published in mid-February 2025.

Several factors contribute to the sustainable development of the market, including the growing demand for personalized music content and changing user preferences. More people around the world are abandoning traditional approaches to listening to music and moving to streaming services that provide extensive collections of compositions of any genre for an acceptable subscription fee. Thanks to such platforms, users can access millions of tracks and podcasts from anywhere in the world where there is a way out. This Internet trend is supported by the wide spread smartphones and development of the infrastructure of high-speed mobile networks. At the same time, the integration of social networks into music applications stimulates user engagement, allowing listeners to share their favorite songs with friends and discover new artists.

Technological advances are named as another driver of the industry. For example, the integration of artificial intelligence and machine learning expands the functionality of music applications. AI algorithms are used to analyze user preferences and habits, which allows you to provide personalized recommendations and automatically form playlists. In addition, AI-based features such as voice recognition make applications more convenient. There is also a trend towards diversification: music applications are overgrown with additional features, offering video content and other entertainment options.

Music service operators develop partnerships with artists and record labels. This strategic collaboration allows exclusive content to be offered, including early releases and unique tracks that are not available on competing platforms. As a result, music platforms can attract more listeners, including those who issue paid subscriptions.

According to the type of applications, the authors of the study segment the market into streaming, services with the ability to download music and online radio. In 2024, revenue in the first of these areas amounted to approximately $17 billion: users appreciate the convenience and versatility of this format. Services with support for downloading tracks provided $6.5 billion, and the online radio segment brought in $3.7 billion. Significant players in the global industry are named:

• iHeartRadio;
• Beatport;
• Pandora;
• SoundCloud;
• Gaana;
• Amazon;
• Anghami;
• Last.fm;
• Tencent;
• Spotify;
• Deezer;
• JioSaavn;
• YouTube;
• Apple;
• Tidal.

Geographically, North America led in 2024 thanks to its well-established digital infrastructure and diverse music content: revenue here was recorded at $10 billion. In second place is the Asia-Pacific region with $8 billion, and Europe closes the top three with an estimate of $7.3 billion. South America secured a contribution of about $1.5 billion, the Middle East and Africa - about $0.4 billion.

In the future, analysts at Market Research Future believe that the industry will maintain positive dynamics. The compound percentage CAGR is expected to be 5.01%. As a result, by 2035, costs could rise to $46.57 billion.^[1]

2021: Streaming continues to grow in U.S. music distribution market

2019

Streaming absolutely dominates the US music distribution market

Paid subscriptions make up 80% of the US streaming market

Five years ago (not shown on the graph), the share was only 25%, and year-on-year revenue grew by 33%.

Data: Mid-Year 2019 RIAA Music Revenue Report, Visualization: Axios

2018: Streaming becomes biggest music sales channel

2017: Thanks to streaming, music sales have returned to growth

Evolution of how music content and its media are distributed

2012:20 million subscribers to music services

The global size of the music market in 2012 amounted to 16.5 billion USD, including digital and physical sales. According to the results of 2012, the digital format accounted for about 5.8 billion USD, which is 8% more than in 2011.

In the world ranking of 2012, the United States still ranks first with a music market of 4.48 billion USD in total for all segments - the indicator decreased by 0.5% compared to the previous year. Japan is in second place with 4.42 billion USD, the UK is in third - 1.33 billion USD. South Korea is 11th with 188 million USD.

The popularity of mobile music download applications is growing worldwide, as digital audio content purchases offer convenience and portability, as well as because the functionality of applications is expanding every year.

Downloading is still the main way to buy digital music, but subscription services are confidently increasing their audience, according to a 2012 report by the International Federation of the Recording Industry (IFPI). Two years ago, there were 8 million subscribers to music services in the world, and now there are already 20 million of them. The share of subscriptions in digital music sales in the world in 2012 was 13%, in Europe - 23%. The Russian music market, according to IFPI, is less than 1% of the world.

2011

Data from J'son & Partners Consulting

According to a study by J'son & Partners Consulting, in 2011, the global digital audio content market grew by 7% to 6.3 billion. USD. The countries considered in the study - the USA, Japan, South Korea, Great Britain - account for about 70% of the global audio content market. Russia's share in the global market is insignificant and amounts to less than 1%.

Mobile phone audio content sales accounted for about 68% of the total audio content market in the world. The dominance of digital audio content sales through mobile networks is due to the convenience of using audio files on mobile phones, which have firmly replaced audio players in the mind of the subscriber, and now it is almost impossible to meet a mobile terminal without support for playing music files.

At the same time, it can already be noted that there are trends towards the growth of the segment of online sales of audio content in the world, since the share of this channel increased by 2% in 2011.

The greatest contribution to the development of the digital sales market for audio content via the Internet was made by the Apple iTunes multimedia service, through which more than 10 billion units of audio files have been sold since 2003. In 2011, Apple iTunes accounted for 70% of all music downloads in the United States. It is natural that the digital sales market for audio content is the most developed in those countries in which Apple's service is available. Apple's main competitors in the digital audio content market are Amazon, 7digital, HMV and Tesco.

How labels' squeeze juices' from online music services

In December 2011, veteran of music Internet services Michael Robertson (Michael Robertson), founder and former executive director of the MP3.com service, the current head of the MP3tunes and DAR.fm service, published a new note in GigaOM, in which he spoke about the secret requirements of record companies put forward by them when concluding contracts for licensing content with music services^[2].

According to Robertson, these requirements are extremely tough for music services and very one-sided, providing record companies with very favorable conditions. Because of this, these requirements were kept in strict secrecy and became known only now, the creator noted MP3.com.

So, under the terms of all contracts with music services, labels actually have every right to unilaterally set prices for music that users buy. Also, when signing each contract, record companies claim ownership of a share in this service.

And to sign the agreement, services are forced to pay them quite large amounts of payments initially, which immediately establishes a high money barrier for many startups. "Large amounts of money are needed in order to simply enter this market. In my opinion, this very much strangles innovations in the services themselves and their business models, "the author believes.

In addition, labels require companies to which they license rights to their content to provide very detailed reports with all data, including each user's accounts, purchase statistics, etc. "Many labels make additional demands, such as providing non-payment reports, such as shares of different categories of music in sales. Labels simply force music services to do business analytics for them. I don't think there are any other industries where this is standard practice, "Robertson writes.

Another important clause in contracts with all major record labels is the requirement that each of the labels be given the best terms of the contract, if any have already been granted to any other label. "This is a form of collusion as each of the labels gets the best terms of the contract that the other labels are seeking. That is why it is usually quite easy for music services to make contact with one of the labels (usually EMI), but it is very difficult with everyone - they can agree to not the most favorable conditions, knowing that other labels will demand more favorable prices for themselves, "says Robertson.

In addition, each contract provides for a very high level of secrecy, strictly prohibiting services from disclosing any information regarding their agreements with record companies. Violation of this condition threatens music services with an instant break of the license agreement and numerous lawsuits.

Thus, the largest record companies, of which today there are four (the "big four" - Universal Music, Sony Music, EMI Group and Warner Music), actually completely control the online music market, giving Internet services no alternatives other than the adoption of the terms of contracts put forward.

According to the creator of the MP3.com, due to such terms of contracts with labels, popular music services:

• Spotify,
• Rhapsody,
• MOG,
• Rdio

and the rest - will never be able to be truly profitable, since most of their income is taken by the "big four."

Notes