Despite the numbers of players offering ‘freemium services’ ad revenues are being forecast to exceed over $1billion worldwide by 2017.
Juniper Research has conducted a recent study that predicts Ad’s on music streaming services will be approximately $780million in 2015 and that this will rise to $1billion by 2017. The increase follows an increasing movement in consumer behaviour with listeners deserting downloading and favouring streaming. The download market experienced its first decline in 2013, and this accelerated in 2014, reportedly down by a further 11-14% in the first 6 months alone (RIAA – US Digital music downloads). As broadband and mobile network costs diminish, so this funnels users towards streaming and presents the opportunity for streamers to boost ad-based revenues. Spotify, recently announced ad revenues grew by 380% in the first quarter of 2015 compared to the same period the previous year.
Apple’s recently launched Apple Music is thought to be a major driver behind the positive forecast which is running both audio and display ads from McDonalds, Home Depot, and Nordstrom amongst others on the subscription service.