A new era for music?


New music positioning in the cloud opens new challenges and possibilities for Neomobile.

2012 was the year of the music industry revival. This revival is mainly owed to the gradual but constant growth of digital music: in 2008, this industry was worth $ 4.3 billion, today it’s worth $ 5.6 billion*.

What drives the market for digital music?

Three elements are fundamental in this new chapter for the music industry:

1. The (legal) download, individual songs or entire albums (iTunes and others) which now accounts for 70% of this market.

2. The advertising, which represents 15-20% of the digital market that found new formats and means of expression in the music.

3. The subscription fee that users pay for portals and apps that offer music in streaming.

The latter, very recent model is based on the subscription fee allowing unlimited access to the songs without ads, and many other services. The world of streaming, the most interesting and fast-growing part of the market, is tackled by new players such as Spotify and Deezer, capturing the attention of Google and especially Apple. Music is definitely in the air, technically speaking. No matter how much the local music or mp3 download still sound comforting, the future of music is created day by day, app after app, with the new ways we access our favourite tunes, through streaming and cloud.

Streaming services market still remains quite limited ($ 600 million turnover  from subscriptions in 2012), but in huge expansion, with 40% growth in 2013, which already can count on a very large user base (about 20 million paying users globally), and is expected to grow significantly over the next 2 or 3 years.

Furthermore, there are many drivers that are accelerating the growth of this new sector:

1. The immediate access to millions of songs, making usability even better of download (legal and illegal) for which several things are necessary: accurate research, update of the mobile device (smartphone or MP3 player), playlists created manually. While with streaming everything is immediately accessible from any device, just synchronizing the music with only one account and obtaining over the air updates for albums or playlist (e.g. charts).

2. Safe and easy payment, which makes these services straightforward to use.

3. Finally, the strong “social” aspect:  the demand and appreciation for the vertical social experience is increasing, simultaneously with Facebook’s positioning as undisputed social leader. Nothing better than music can act as an emotional hook that connects people.

It becomes obvious, at this point, how premium streaming services have found the way to open the world of music to the world of social networks and at the same time, manage to monetize the vast number of users, that access these services daily, from their PC or even more from their smartphone.

On the other hand, it’s a publicly known fact that various web portals, more or less social, have created their fortune on music, from MySpace to YouTube and Twitter: all these portals have built their strength and their user base on the music, which is a very strong factor of socialization, especially among young people.

Until now, however, the music was a tool used by social networks to attract users and monetize them, but today the music streaming services are using social media as means of engagement to attract more and more users and provide an experience that goes beyond listening. That’s why music streaming services have all the requirements to satisfy a market that is getting accustomed to the world of cloud and that is leaving the “download” behind, becoming famous for both critical mass of users and turnover. 2012 was the first year since 1999 that has seen the music industry growth again, and today we’re observing the evolution of this market in a new light.

Neomobile, a leader in the digital entertainment, is willing to face the challenges of this market by supporting the international expansion of Soundtracker, one of the first real Social Music Services. Soundtracker is present on all major mobile platforms and it allows free access to a 22 million songs catalogue to hundreds of thousands of users every day, satisfying the most diverse musical tastes and inspiring the social discovery through music.


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*All data source: International Federation of the Phonographic Industry “Digital music report 2013”



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