With the exception of vinyl records, subscription streaming music services remain the number one growth driver in the global music market, accounting for more than 70% of spending on music last year, according to Futuresource Consulting.
Yet, as measures to halt the spread of COVID-19 begin to reshape the lives of consumers, music streaming is experiencing a temporary decline, with consumption down from 15% to 20%.
“We may have expected to see an uptake in the use of streaming music services, as people become confined in their homes,” market analyst Alexandre Jornod said in a statement. “This is linked to consumers adjusting to new confinement rules, which have removed key music listening situations like the daily commute, as well as office and gym time.”
Futuresource says that as families spend more time at home together, music consumption is becoming a shared activity. Before the pandemic people were using separate accounts to play different music, now smart speakers are likely to be used with a single account used to play music in the household.
The London-based firm said there is also competition from gaming, movie and TV show streaming. These activities require a higher level of attention and tend to be favored when some extra time is freed up as a result of routines being interrupted.
“Once consumers become accustomed to the situation and establish new routines, we expect streaming music to get back to levels similar to before the crisis,” Jornod said. “Home listening will dominate, with a shift in the music types and genres as consumers seek out lean-back mood playlists as opposed to searching for specific songs or artists.”
Meanwhile, Futuresource said Spotify and Apple account for more than 60% of combined global subscriptions. Spotify remains No.1 globally, with Apple No. 1 in the United States. Amazon Music’s multiple streaming plans cater to a wide audience, although its subscriptions are closely linked to Echo smart speaker geographies, which skew heavily towards the U.S. and U.K., according to Futuresource.
The research firm contends Google-owned YouTube Music has the potential to become a key player thanks to its established YouTube audience. Smaller players like Deezer, Tidal and Napster are focusing instead on strategies such as targeting local markets, serving niche audiences or B2B operations.
“Streaming music subscriptions also benefit from markets where physical media has been historically strong and they are now transitioning to streaming,” Jornod said, alluding to Germany, Japan and France, which he said are experiencing accelerated adoption — unlike maturing markets in North America.
“Watch out for a rise in podcasts beginning to exert its influence, as well as enhanced listening experiences such as Hi-Res audio, Dolby Atmos Music and Sony 360 Reality Audio,” Jornod said.