Many in the music industry believe that cloud-based music services will "one day" become the mainstream method of consuming music. The question is just when.
Proposing to answer that question is ABI Research, which in a new report pegs 2016 at the date when music will shift from a predominantly ownership model to a streaming access model ( see Billboard story).
Driving this conversion is the growth of mobile phones as portable music players, the research firm says. Mobile music streaming services are expected to collectively claim 5.9 million subscribers worldwide by the end of this year, and grow at a compound annual growth rate of close to 95% until 2016, when it will reach 161 million, according to the research groups' predictions.
Some regions will get there soon than others. By the end of next year, the Asia-Pacific area will become the largest regional market for mobile music streaming services.
Another expected growth driver is lower process. ABI research director Neil Strother expects a gradual decline of subscription pricing, "based on the assumption that the rights-holders will lower their royalty demands," he says in a statement. "Record labels and collecting societies should not overplay their hands when it comes to royalty issues. If consumers do not have convenient and affordable legal alternatives, they will simply enjoy their music by other means."
That's a pretty big assumption, but not totally out of the question. Labels have already relaxed their licensing demands for mobile streaming services, allowing newcomers like Rdio and MOG to offer mobile-based subscription plans for as low as $10 a month, compared to $5 a month for Web-only access. Brining the mobile costs down to $5 as well is what many thing will be the tipping point for converting iTunes buyers into subscription plan customers.