Music Streaming Market Trends

Growth Drivers

• Smartphone& internet penetration: The increasing adoption of smartphones around the world, coupled with increasing broadband and mobile‑internet access, is enabling more users to stream music consistently, driving growth in the music streaming market.  In this regard, IBEF in January 2025 reported that India has risen to become the second-largest smartphone manufacturer, wherein the government programs such as Make in India and the PLI scheme have pushed mobile production from reaching just 25% of domestic needs a decade back to 97% in 2024. The report also mentioned that smartphone exports have also expanded sharply, growing 42% in the year 2023-24, making them India’s fourth-largest export item. Further, with more than 200 manufacturing units and continued policy support, India will help the stronger adoption of music streaming in the upcoming years.
• Subscription model adoption: Most listeners are readily moving from ad-supported or free tiers to paid subscriptions, which is driven by better audio quality, offline downloads, and driving business in the music streaming market. Testifying at the World Economic Forum in March 2023 revealed that music streaming has reshaped the worldwide music industry, driving a sustained recovery after years of declining physical and digital download sales. Similarly, industry revenues surpassed USD 26.2 billion in 2022, which marks an eighth consecutive year of growth, wherein streaming alone contributed 67% of total earnings. It also mentioned that as consumers shifted towards digital access over ownership and the widespread adoption of streaming platforms reversed the industry’s 20-year downturn trajectory, thereby establishing subscription-based streaming as the most dominant force in today’s music economy.
• Personalization through technology: Most of the platforms are utilizing AI to recommend playlists and songs that are suitable to individual tastes, by improving user engagement and retention, which is also a major growth contributor for the music streaming market. In June 2025, Deezer introduced the world’s first-ever AI-tagging system for music streaming, marking all albums that contain fully AI-generated tracks to ensure complete transparency for listeners. The company’s AI-music detection tool reveals that about 18% of newly uploaded daily tracks, which is over 20,000 songs, are entirely AI-generated, with roughly 70% of their streams identified as fraudulent and removed from royalty calculations. To protect artists’ earnings and maintain platform integrity, the company is excluding fully AI-generated content from algorithmic and editorial recommendations.

Challenges

• Intense competition: The music streaming market is extremely competitive, wherein the established players such as Spotify, Apple Music, and Amazon Music, along with emerging regional platforms, are all vying for user attention. The existence of this intense rivalry pressures companies to make investments heavily in marketing campaigns, content creation, and innovative advanced features to attract and retain subscribers. On the other hand, differentiating themselves through personalization, social engagement, and device integration becomes necessary but more expensive. Hence, this competition creates price wars, limiting profitability, and making growth under such conditions a persistent strategic challenge in this field.
• Licensing and royalty complexities: This is yet another restraining factor in the music streaming market. In this regard, licensing music and managing royalties represent significant challenges for streaming services, especially while operating across multiple countries with different copyright laws. In this regard, platforms must negotiate agreements with record labels, publishers, and artists, which can be both time-consuming and complex.  In addition, disputes in terms of royalty rates or delayed payments can harm relationships with artists and result in potential litigation. Moreover, streaming services need to ensure proper attribution and reporting for millions of tracks, thereby necessitating a robust system for tracking usage and payments makes widespread adoption even more complex.