The ERA has commissioned a report from consultants OC&C, which found that new services and innovations targeting different music fans more specifically could double the size of the already booming music streaming market in as little as four years to £1.6 billion.
The ERA reports that key to the growth forecast is increasing streaming penetration by creating a range of new services targeting differing customers.
OC&C forecasts that, left as is, the UK music streaming market would still grow from £829 million in 2018 to £1 billion-£1.1 billion in 2023, a compound annual growth rate of 5%-7%.
However by targeting committed music fans with super premium and add-on services and by finding ways to tempt current non-subscribers the market could grow to a range of £1.25 billion-£1.6 billion, a compound annual growth rate of 12%-18%.
The ERA says that central to the OC&C study is a detailed analysis of the progress of streaming in different demographics (it accounts for 69% of listening time for 16-19 year olds but only 16% of listening time for 45-54 year olds) and what could be done to persuade each group either to trade up from current services or begin to subscribe for the first time.
The report details how businesses in other sectors ranging from mobile phone operators to gyms and video subscription services like Netflix have driven growth by creating a range of services for customer groups with different needs who may also value features differently.
While “all-you-can-eat” music streaming services have huge success and remain the default option for most, some consumers may be more easily reached with other features, the report states. In fact, OC&C calculates that more innovation in services could result in a potential £500 million boost to the market. These range from creating new premium tiers and new entry points to paid streaming to offering the ability to access streaming services without taking out a subscription. To read the ERA’s summary in full, click here.