Digital music refers to music that is stored, transmitted, and accessed in a digital format, typically through electronic devices such as computers, smartphones, tablets, and digital audio players. Digital music can be created, distributed, and consumed entirely in digital form, without the need for physical media such as CDs, vinyl records, or cassette tapes. Digital music can be in various file formats, such as MP3, AAC, FLAC, or WAV, and can be downloaded, streamed, or purchased online from digital music platforms, online stores, or streaming services. Digital music has revolutionized the way music is produced, distributed, and consumed, providing greater accessibility, convenience, and flexibility for music lovers around the world.
The market consists out of music streaming, which is the streaming of music through apps on a subscription basis, music downloads, which is the download of music on a device, music streaming advertising and podcast advertising, which are the advertising spendings in each of the markets.
The market comprises revenues, users, average revenue per user, and penetration rates. Revenues are generated through purchases and subscriptions. Market numbers for digital music can also be found in the digital media topic. Key players in the market are companies, such as Spotify, Apple or Amazon.
Digital audio content that is distributed to the end user over the internet
Paid digital downloads of single tracks, albums, and/or album compilations
Subscription-based streaming services (free, ad-supported, and paid)
Digital Advertising from ad-supported free versions of premium subscription services plus services funded by advertising
The Digital Music market is a forerunner of change that many digital markets have yet to experience in full. Nonetheless, the Music Downloads market is the only one in the Digital Media market that is expected to diminish over the next few years. Music streaming services have successfully convinced consumers of the benefits of streaming audio content. Although we do not expect music downloads to disappear completely, it is clear that sales from this market will be absorbed more or less completely by the shift to music streaming.
The data encompasses B2C enterprises. Figures are based on the Music, Radio & Podcasts market, which comprises all revenues generated by traditional and digital radio advertising, consumer purchases of live music event tickets, all sales of tangible audio recording formats, paid digital downloads of professionally produced single tracks / compilations, ad-supported services, and subscription-based, on-demand streaming services. All monetary figures refer to consumer spending on digital goods or subscriptions in the respective market. This spending factors in discounts, margins, and taxes.
Modeling approach / market size:
The market size is determined through a bottom-up approach. We use annual financial reports of the market-leading companies and industry associations, third-party studies and reports, survey results from our primary research (e.g., Consumer Insights), as well as performance factors (e.g., user penetration, price per product, usage) to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country-specific industry associations, such as various macroeconomic indicators, historical developments, current trends, and reported performance indicators of key market players. In particular, we consider average prices and annual purchase frequencies.
We apply a variety of forecasting techniques, depending on the behavior of the relevant market. For instance, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption. The main drivers are GDP per capita, consumer spending per capita, and 4G coverage.
The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level. The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. The market is updated twice a year. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development). Consumer Insights data is reweighted for representativeness.