Music streaming services using cloud technology remain a niche product despite record labels’ growing flexibility on how they license their material and improved technology, according to Forrester Research.

The report examines how music consumption habits are changing in the US by surveying the attitudes of 4,700 music listeners during 3Q 2009.

“Until the latter part of the 2000s, rights owners clung to the safe but limited territory of $0.99 download stores and $9.99 streaming subscriptions,” said Mulligan.  

“With the realisation that caution was not doing enough to turn around the music industry meltdown, a new period of licensing strategy commenced, driven primarily by the record labels.”

However, despite the number of users accessing music streaming services on their mobile phones achieving unprecedented popularity, most people still listen to digital music on devices such their PCs.

“The fact remains that digital music has not yet broken free of the chains of the PC for most consumers,” said Mulligan.

“The music industry meltdown changed the rules forever, and digital consumers no longer want to pay for music. But they do want access to it and not just on their PC,” he added.

Cloud music services, such as Spotify, which allow users to access their music from various devices are beginning to meet consumer demand for music on the go, according to Mulligan.

The rise of these services has been buoyed by the increased number of smartphones on the market, as well as improvements in mobile networks’ ability to handle the traffic required to support them.

However, despite this trend these services are still confined to younger audiences and remain niche products.

The survey found that listening to music on mobile phones is still heavily skewed towards younger listeners with 63% of all those listening to music on their phones aged between 18 and 24, according to the research.

“The ability to extend a music experience across multiple devices and locations is central to any music service that leverages the cloud. To do that well services must understand on which devices their target customers are likely to want to take their music experience,” said Mulligan.

The study comes as Apple is expected to launch cloud music services that allow users to access their entire digital music libraries that are stored in a virtual server – or cloud – and streamed to any online device.

Apple, whose iTunes Store dominates the digital music industry,  bought online music streaming service Lala, which sold tracks for $0.10 and allowed people to store their music libraries on the company’s servers.

Apple closed Lala six months after its initial purchase but this has added to speculation that the company will use the music streaming technology to launch a music streaming service under its own brand.

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Published 12 July, 2010 by NMA Staff

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