Music revenues tough to predict

A recent tail-off in growth from a la carte digital music services makes predictions that digital music revenues will hit $20 billion (€14.5 billion) in 2015 seem ambitious, a leading music service company says.
Will Mills, music and content director at music discovery firm Shazam told Telecoms the market is in a transition phase from a-la carte to subscription based services, which makes it difficult to formulate precise revenue forecasts.
“Accurate modeling of these subscription revenues is a challenge, due to relatively limited global rollout and adoption,” Mills says.
He noted that Ovum forecasts regarding the value of the market by 2015 “seem a little ambitious, given the recent cooling in digital growth from a-la carte digital downloads.”
Mills view was borne out by Ovum, which notes that growth in digital music downloads is slowing in the US – down 3% - and predicts the trend will soon spread to Europe.
Despite the tricky future, Mills says digital music “undoubtedly presents a very large opportunity,” as an explosion in smartphone ownership fuels usage of music services.
“Music and the broader category of mobile discovery…will be a key driver as an entry point and growth engine for these music and entertainment services,” Mills says.