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Study: Streaming music use to explode in five years

ABI Research says that smartphones could help propel music-streaming services from 5.9 million subscribers this year to 161 million in 2016.

Don Reisinger
CNET contributor Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.
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Don Reisinger
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If you think music-streaming services are big now, just wait five years.

According to data compiled by ABI Research, music-streaming services are set for rapid expansion in the coming half-decade, and they have mobile phones to thank for it. By the end of this year, ABI said, subscribers to paid music services who access them from a mobile phone will number about 5.9 million worldwide, and by 2016, that figure will grow to more than 161 million subscribers. That amounts to an annual growth rate of about 95 percent, the research firm said.

ABI Research on growth of music streaming.

The growth of streaming services comes as digital sales remain relatively stagnant.

In a report released earlier this year by Nielsen SoundScan, the definitive source on the state of the music industry, overall U.S. music sales were down 2.4 percent in 2010. Digital sales were up just 1 percent.

Part of the significant growth of streaming services will be attributable to the sheer number of people using mobile handsets. As more people opt for smartphones, they will increasingly turn to streaming options to find the content they want to hear, ABI said

The Asia-Pacific area will become the largest regional market for mobile music streaming at some point in 2012, according to ABI. Once it hits the top, that market's consumption of streaming services will continue to expand and help lead the explosion in streaming services.

Looking ahead, ABI Research believes that Rhapsody and Spotify, which offer paid access to their music tracks to mobile devices, will benefit most from the growth of streaming music.

For now, it would seem that Apple, which offers the top pay-per-download digital-music marketplace in the industry, could stand to lose quite a bit as streaming services expand.

Then again, it might not.

Last month, a report in the Wall Street Journal claimed that Apple is working on turning its MobileMe online-storage service into a cloud-based entertainment platform that would allow users to stream digital content over the Web. That report followed a similar story in which music and film sources told CNET last year about Apple's intentions to deliver a cloud-based music and movie platform.