Number of Global Music Streaming Subscribers Will Grow Almost Threefold From 2012 To 2017

New digital audio research from Parks Associates predicts the number of music streaming subscribers worldwide will reach 15 million by 2017, and the number of connected audio products will nearly double between 2013 and 2017. Analysts report a strong correlation between the growing penetration of networked audio products, including wireless speakers, speaker docks, multiroom digital music systems, and A/V receivers, and music service subscriptions to Rhapsody, Pandora, Rdio, Spotify, and others.

"Business models and the prospects for profitability in Internet-based music services have changed substantially. The market for connected audio devices is also changing. Parks Associates first reported on the linkages between music services and connected audio products in 2011," said Brett Sappington, director, research, Parks Associates. "Since then, the number of users of major streaming music services has increased over 200%, while growth in paying users has exceeded 80%."

The report Evolution of Digital Music on Connected Devices finds worldwide unit sales of audio products with networking capability have increased more than 170% to exceed 24 million in 2012. U.S. owners of music systems and devices that connect to the Internet are more than twice as likely as average broadband households to subscribe to music services. In a May 2013 U.S. survey, fourteen percent of households with connected music systems paid for music services, compared to six percent of households without connected music systems.

"Industry attention has focused on conflicts between music services such as Spotify and artists like Thom Yorke from Radiohead, yet the partnerships between streaming music companies and connected CE manufacturers or content providers are fundamental to driving consumer usage," Sappington said. "Partnerships such as Pandora with Google's Chromecast or the Rdio deal with Live Nation will put their services in front of more people, and that accessibility is translating to more users."

Parks Associates analysts say streaming music companies are aggressively tying their services to connected CE products. For example, Pandora is available on more than 900 CE devices, including a TV-based feature available on the Xbox 360 gaming console.