Internet Music Services Industry —
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Seaside, CA Cross-device flexibility of the in-stream audio avail, improving blended CPMs, plus simplified or reduced pricing tiers associated with subscription/hybrid digital music programming have spurred a services revenue jump of 28.6% in 2015, against listening hour increases coming in at 17%, according to an industry analysis by AccuStream Research.
This industry trade resource, Internet Music Programmers 2015 - 2018: A Stakeholder’s Guide to IP Radio, offers music services, brands/buyers, adtech vendors, agencies, rep firms, bandwidth, media player and software platform providers, CE manufacturers, as well as investors, a deep volume of audience and monetization analysis to inform media planning, capacity provisioning and requisite investment decision making.
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Revenue analytics and vital performance benchmarks include monthly hours by programmer/service, subscriber totals (domestic and international), inventory by avail format (audio, video, display), sellout rates, CPMs, gross media spend, revenue per thousand hours of programming (RPM) and expected total royalty rate fees paid across the industry at 47%.
Each 1,000 hours of listening across the spectrum of digital music services (excluding online song stores) is tracking at $58.97, and forecast to improve steadily through 2018.
Mobile continues to be a growth engine for programmers. Pandora now delivers 83% of listening through non-desktop devices, while audio inventory loads and blended CPMs have also increased; the company has grown RPM by 30% over the past year.
Listening hours are on a trajectory to register 45 billion hours of audience engagement time across all devices connecting to broadcast streaming, track-play, subscription and ad supported music play libraries. Ad-supported listening hours made up 76% of total hours in 2014, and forecast at 78% in 2015, growing at a 30.5% rate.
Programmers remain focused on balancing listening hour growth against increased allocation and exploitation of audio inventory, with sellout estimated at 68% in 2015. In-stream audio units (including gateway ads and in-stream placements) are projected at 285 billion units in 2015, an increase of 16.9% over 2014.
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Advertising is projected to make up the majority of sector revenue going forward, estimated at 62.4% in 2015, and expected to deliver an increasing share of monetization efforts through 2018.
Subscription service revenue is forecast to improve by 25.5% in 2015 (including Rhapsody’s global business, SiriusXM’s MySXM and Spotify’s U.S. operations) to $1 billion. We expect to see reduced monthly subscription pricing tiers (down an average of 20.l% in 2015) exhibit significant elasticity of demand, increasing total subs by 57.2% to 15.9 million, based on current CAGR performance indicators.
AccuStream Research produces investment grade industry and trade research bridging digital video, internet music radio, download entertainment, digital video/audio advertising/spend, video and mobile adtech platform revenue and M & A valuations, ecosystem trade surveys and support, CDN and integrated media optimization software, ecosystem integrator services, and conducts AvailPlay audience experience, digital diary and video impression monitoring services on-demand.
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