The audio streaming services company, Spotify Technology, recently announced that it aims at generating $100 billion in revenue in the next 10 years. The company expects high margin returns from its rapid expansion into podcasts and audiobooks. Following the announcement, the company's stock price increased 5%, after losing 53% of its market value so far in 2022. Apart from music, podcasts, and audiobooks, Spotify plans to expand into new content categories over the next decade for increasing its average revenue per user.
Global Online Music Streaming Industry Overview
According to GlobalData, the market value of global online music streaming increased to $16.4 billion in 2021, from $14 billion in 2020, indicating annual growth of 17%. Strong growth in the market in the last few years is attributed to the increasing digitization of music and greater access to the internet. The COVID-19 pandemic and the subsequent lockdowns prompted people to turn to music for comfort. With live music concerts non-existent in much of the world due to lockdowns, consumers turned to music streaming as a substitute.
Major Companies in the Market
Spotify is the leading company with strong features and a global expansion that enabled it to acquire a large subscription base, and ad-supported revenue from the users of its free-of-charge service. Since the emergence of Spotify on the music streaming market, a number of other large technology companies entered the market owing to its strong potential for growth.
Apple Music, with 72 million users, is the second-most popular company after Spotify. It does not offer a free service and remains entirely reliant on paid subscriptions. YouTube Music, a music streaming platform developed by Google and the entertainment website YouTube, is a relatively new entrant, but it benefited from the strong presence of its developer company, YouTube, and its parent company, Google. The streaming service acquired 50 million users.
Outlook
The leading companies continue to innovate and market their products to attract the remaining population, which is still waiting to adopt music streaming. Amazon, Google, and Apple are among the largest technology companies in the world and launched their music streaming platforms, creating an intensely competitive environment. However, the continued growth of digital infrastructure, including the increasing adoption of high-speed internet, will continue to facilitate the growth of the online music streaming market.
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