After struggling to catch on with consumers, subscription music services are finally poised to take off.
That’s according to an optimistic report that predicts paying subscribers to music services such as Spotify, Rhapsody and Rdio will hit 161 million worldwide in 2016. That compares to just 6 million by the end of this year, according to ABI research.
The nascent industry is filled with a number of players looking to capitalize on the growth of smartphones and tablets, which experts view as key to spurring demand for streaming music subscriptions.
“Clearly, the weight of the music industry has moved from physical to digital and to digital mobile,” said ABI’s Neil Strother.
Consumers have been slow to adopt subscription music services, in part because of free, ad-supported models like Pandora, which filed for an IPO this year. Pandora has about 80 million users but less than 50,000 are paying customers.
The international streaming music service Spotify, which is poised to enter the US after striking deals with major music companies, just passed the one-million subscriber mark.
Rdio, backed by the founders of Skype, offers a song catalog that tops 8 million, compared with Pandora’s 750,000 tracks, for prices starting at $4.99 a month.
“Only recently has it even been possible to offer these types of subscription-unlimited access to all music for 30 cents a day,” said Rdio’s operating chief, Carter Adamson.
To get to this point, the music industry had to be willing to go along and customers had to have easy access to services through mobile apps.
ABI’s Strother said that to further spur the industry, subscription services will need to cut deals with wireless carriers, which worry their networks will be strained by heavy data usage from streaming services.