Digital Music Industry Revenues Plummet As Consumers Demand Music Everywhere

34% of U.S. Broadband Households Access Music via Their Mobile Phone

Revenue growth in digital music dropped from 91% in 2006 to 6% in 2010, according to a new Parks Associates report. Digital Music Services: Trends and Outlook evaluates consumers' growing demand for music everywhere solutions and industry's response with new business models including enhanced discovery engines, multidevice access, music -centric social networking tools, and digital locker options like those being launched by Amazon, Apple, and Google.

While over 50% of U.S. broadband households prefer the computer as their digital music access point, proliferation of smart mobile and connected CE and new cloud -based delivery models are expanding music services into more unique consumer devices and environments. In 2010, 34% of U.S. broadband consumers were using their mobile phone as a music player, up from 9% in 2007. In response, digital music service companies such as 7Digital, Pandora, and Spotify have been proactive in forming OEM partnerships to make their services accessible through more devices.

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"For years, the music industry concentrated on piracy as the biggest threat, but that focus is changing," said Laura Allen Phillips, Research Analyst, Parks Associates. "Consumers are used to the idea of 'free' music, so service providers need to add something of value beyond the music itself."

Parks Associates' new report examines how key players from transactional vendors and streaming music services to mobile operators and consumer electronics OEMs are using digital music to generate revenues, increase the value of their product lines, and promote stickiness within their subscriber bases. As of 2010, the combined user base of Pandora, Spotify,, and Deezer topped 100 million worldwide, with Pandora alone accounting for over 71 million users.

Digital Music Services: Trends and Outlook highlights the challenges facing the industry, including the increasing popularity of ad -supported services and the ongoing threat of digital piracy, as well as the industry response to these and other challenges. The report also explores market players, evolving user consumption models, and the value of add -ons such as effective music discovery mechanisms.

Parks Associates will present new consumer research and examine business issues for the digital music and media industries at CONNECTIONS™, June 28 -30, Santa Clara, in the sessions "Digital Media Distribution: Cloud Publishing and Delivery" and "The Evolution of the Personal Cloud."

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About Parks Associates: Parks Associates is an internationally recognized market research and consulting company specializing in emerging consumer technology products and services. Founded in 1986, Parks Associates creates research capital for companies ranging from Fortune 500 to small start -ups through market reports, primary studies, consumer research, custom research, workshops, executive conferences, and annual service subscriptions.

The company's expertise includes new media, digital entertainment and gaming, home networks, Internet and television services, digital health, mobile applications and services, consumer electronics, energy management, and home control systems and security.

Each year, Parks Associates hosts executive conferences CONNECTIONS™, with support from the Consumer Electronics Association (CEA)®; CONNECTIONS™ Europe; and Smart Energy Summit. | | |

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