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Music and Other Audio - CDs, Streaming, Downloads & Podcasts - UK - May 2017

Published By :

Mintel

Published Date : May 2017

Category :

Media

No. of Pages : N/A

After price the factor that has the most influence on which subscription streaming service people choose is sound quality. Sound quality offers a clear way for streaming services to establish a premium tier option that capitalises on more invested music listeners. Improved data and broadband speeds as well as developments in terms of smartphones should further broaden the appeal of hi-res streaming tiers.

Table of Content

OVERVIEW
What you need to know
Products covered in this Report

EXECUTIVE SUMMARY
The market
Subscription streaming to drive music industry growth
Figure 1: UK music industry income from physical, digital and streaming, 2011-21
Vinyl disrupts physical decline
Improved internet speeds boost reliability of streaming
YouTube battle highlights continued controversy over artist pay
Smart speakers create new opportunities for streaming service differentiation
Key players
Amazon launches Music Unlimited
SoundCloud launches new mid-tier subscription service
Spotify encourages premium switch through early content
Tidal continues to prioritise music quality
The consumer
Over a third of internet users stream music
Figure 2: Use of music formats, December 2016
YouTube is the primary way of streaming free music
Figure 3: Use of free streaming services, December 2016
Spontaneous song selection is the main way people stream music
Figure 4: Listening habits on streaming services, December 2016
Spotify Premium remains the most popular paid-for service
Figure 5: Use of paid-for streaming services, December 2016
Price is the key factor influencing choice of paid service
Figure 6: Factors influencing choice of paid-for streaming service, December 2016
Having a physical music collection is important to many
Figure 7: Purchasing habits for physical media, December 2016
Many podcast listeners are willing to pay for content
Figure 8: Podcast listening habits, December 2016
What we think

ISSUES AND INSIGHTS
Differentiating subscription streaming services through price…
The facts
The implications
…and through content
The facts
The implications
How to monetise podcasts
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
Subscription streaming to drive music industry growth
Vinyl disrupts physical decline
Smart speakers create new opportunities for streaming service differentiation
Improved internet speeds boost reliability of streaming
YouTube battle highlights continued controversy over artist pay

MARKET SIZE AND FORECAST
Subscription streaming to drive music industry growth…
…but it is cannibalising income from digital sales
Figure 9: UK music industry income from physical, digital and streaming, 2011-21
Figure 10: UK music industry income from physical, digital and streaming, 2011-21
Segment forecasts
Figure 11: UK music industry income from physical formats, 2011-21
Figure 12: UK music industry income from digital sales, 2011-21
Figure 13: UK music industry income from streaming services, 2011-21
The impact of Brexit on the music industry
Forecast methodology

MARKET SEGMENTATION
Subscription streaming cancels out declines in other music formats
Figure 14: UK music industry income, 2011-15
Vinyl disrupts physical decline
Figure 15: Physical album sales, 2013-16
Digital sales also drop
Figure 16: Digital album sales, 2013-16
Audio streams increase by 67% in 2016
Figure 17: Volume of UK audio music streams, 2014-16

MARKET DRIVERS
Continued growth in mobile device ownership
Figure 18: Personal ownership of consumer technology products, November 2015 and September 2016
Smart speakers create new opportunities for streaming service differentiation
Figure 19: Ownership and interest in smart speakers, December 2016
Improved internet speeds boost reliability of streaming
Figure 20: Superfast (?30 Mbps) fixed broadband connections, 2011-15
YouTube battle highlights continued controversy over artist pay

KEY PLAYERS – WHAT YOU NEED TO KNOW
YouTube is the most widely used source of streamed music
Amazon launches Music Unlimited
Amazon pushes voice control with Alexa
SoundCloud launches new mid-tier subscription service
Spotify creates more varied personalised playlists
Spotify encourages premium switch through early content
Tidal continues to prioritise music quality

STREAMING MUSIC SERVICES – MARKET SHARE
YouTube is by far the most widely used free music service…
Figure 21: Use of free streaming services, December 2016
…while Spotify Premium leads the way in the paid-for market
Figure 22: Use of paid-for streaming services, December 2016

LAUNCH ACTIVITY AND INNOVATION
Amazon launches Music Unlimited
Amazon pushes voice control with Alexa
SoundCloud launches new mid-tier subscription service
Spotify creates more varied playlist options
The Daily Mix
Weather-based playlists
Potluck feature for parties
Spotify encourages premium upgrades through early access
Tidal continues to prioritise streaming quality
EE partners with Apple Music
Audible branches out into podcasts
Streaming services create original podcasts

BRAND RESEARCH
Brand map
Figure 23: Attitudes towards and usage of selected brands, February 2017
Key brand metrics
Figure 24: Key metrics for selected brands, February 2017
Brand attitudes: Apple Music and Spotify have established loyalty
Figure 25: Attitudes, by brand, February 2017
Brand personality: Spotify and Amazon Music associated with “fun”
Figure 26: Brand personality – Macro image, February 2017
Spotify most closely associated with being cool
Figure 27: Brand personality – Micro image, February 2017
Brand analysis
Spotify has cultivated a very positive brand impression
Figure 28: User profile of Spotify, February 2017
Amazon Prime Music has low awareness
Figure 29: User profile of Amazon Prime Music, February 2017
Apple Music has positive image but is viewed as less accessible
Figure 30: User profile of Apple Music, February 2017
Google Play Music needs a stronger brand image
Figure 31: User profile of Google Play Music, February 2017

THE CONSUMER – WHAT YOU NEED TO KNOW
Over a third of people stream music
Spotify Premium remains the most popular paid-for service
Playlists have become a popular way to stream music
Price is the key factor influencing choice
Having a physical music collection is important to many
Many podcast listeners are willing to pay for content
Seven in 10 are skipping past podcast adverts

USE OF MUSIC FORMATS
Over a third of people stream music
Figure 32: Use of music formats, December 2016
Physical formats hold fairly consistent appeal across age groups
Figure 33: Use of music formats, by age, December 2016
Income skew suggests possibilities for tiered streaming options
Figure 34: Use of paid-for streaming services, by household income, December 2016
‘Hardcore’ music fans are purchasing physical discs

USE OF STREAMING SERVICES
YouTube is the primary way of streaming free music
Freemium model could be phased out in favour of tie-ups and introductory offers
Figure 35: Use of free streaming services, December 2016
Spotify Premium remains the most popular paid-for service
Figure 36: Use of paid-for streaming services, December 2016
Two in five use more than one paid-for service
Figure 37: Repertoire of paid-for streaming services, December 2016

LISTENING HABITS ON STREAMING SERVICES

FACTORS INFLUENCING CHOICE OF PAID-FOR STREAMING SERVICE
Price is the key factor influencing choice
Figure 40: Factors influencing choice of paid-for streaming service, December 2016
Sound quality would influence choice of two in five subscription streamers
One in three are influenced by exclusive music
Spotify prioritises playlists and recommendations
Over a fifth prioritise artist pay

PURCHASING HABITS FOR PHYSICAL MEDIA
Having a physical music collection is important to many
Vinyl subscription services create exclusivity
Figure 41: Purchasing habits for physical media, December 2016
Parents of under-18s are more likely to buy physical media as gifts

PODCAST LISTENING HABITS
Most podcast listeners are frequent users
Many podcast listeners are willing to pay for content
Figure 42: Podcast listening habits, December 2016
Seven in 10 are skipping past podcast adverts

APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology

APPENDIX – MARKET SIZE AND FORECAST
Forecasts
Figure 43: UK music industry income from physical, digital and streaming, 2016-21
Figure 44: UK music industry income from digital sales, 2016-21
Figure 45: UK music industry income from physical formats, 2016-21
Figure 46: UK music industry income from streaming, 2016-21
Forecast methodology

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