by Background music refers to musical content that plays in the background in public and commercial spaces like shopping malls, retail stores, cafes, restaurants and others. It is aimed at improving the ambience and customer experience while shopping or dining. Background music services offer a wide catalog of music genres and playlists customized for different business types and customer demographics. They provide hassle-free music licensing and are cost-effective compared to purchasing and managing individual music tracks.
The global background music market is estimated to be valued at US$ 1722.38 Mn in 2023 and is expected to exhibit a CAGR of 37% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
Music streaming usage has grown exponentially over the past few years with more customers preferring on-demand streaming over downloads and CDs. Background music service providers are leveraging this trend by developing customized streaming playlists for businesses. They offer streaming integration that allows playing high-quality background music seamlessly through existing audio systems without any licensing issues. As businesses look to enhance customer experiences through ambient music, demand for cost-effective streaming-based background music solutions is expected to surge significantly. This evolving opportunity in music streaming can fuel strong revenue growth for players in the background music market over the coming years.
Porter’s Analysis
Threat of new entrants: The background music market poses moderate threat of new entrants as it requires huge initial capital expenditure for infrastructure development and operations. However, new players can enter the business by licensing their music to fitness centers and restaurants at affordable prices.
Bargaining power of buyers: The bargaining power of buyers is high in this market as buyers have many suppliers to choose from. They can negotiate better deals and prices while licensing music as per their business needs and budgets.
Bargaining power of suppliers: Music composers and independent artists have moderate bargaining power due to the presence of many buyers in the market. However, established music labels have a stronger position as they offer popular tracks needed by most buyers.
Threat of new substitutes: The threat of substitutes is low as background music has no close substitutes for setting ambiance in public spaces like fitness centers, cafes, and malls.
Competitive rivalry: The competitive rivalry is high among major players due to the presence of many global and regional players offering similar music genres and playlists to buyers.
SWOT Analysis
Strength: The background music market possesses a large catalogue of entertaining music tracks across various genres ranging from pop, rock, instrumental to jazz and classical. This wide selection caters to diverse business segments.
Weaknesses: Independent artists face financial constraints to promote their music. They also lack bargaining power against big music labels. Piracy is a concern for players as unlicensed music often undercuts their revenues.
Opportunities: Growing adoption of subscription-based music services in businesses presents an opportunity to generate recurring revenues. Emerging technologies like AI can help curate personalized playlists to engage customers for longer durations.
Threats: Changing consumer preferences and emergence of new music genres pose challenges to existing content. Economic downturns may force some businesses to cut costs by discontinuing background music services. Tighter copyright laws also threaten illegal music downloads and usage.
Key Takeaways
The Global Background Music Market Size is expected to witness high growth between 2024 to 2031 owing to rising establishment of cafes, restaurants,fitness centers, retail outlets and other public spaces that seek to enhance customer experience through upbeat background music.
The regional analysis shows North America dominates currently due to the large number of organised retail chains, fitness centres, and food service outlets actively using background music services in USA and Canada. Europe also holds major share with UK, Germany and France accounting for highest subscriber base of music streaming platforms.
Key players operating in the background music market include AECOM, Dinclix Ground Works, Hyperloop India, Hyperloop One, Inc., Hyperloop Transportation Technology, Space Exploration Technologies Crop.,Tesla, Inc., TransPod Inc., Uwashington Hyperloop, and VicHyper. These leading providers offer customised music solutions and licensing options to businesses according to their unique audience profile and location.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
