London - Cloud-based music streaming services, such as those offered by Rhapsody and Spotify, "will become a more important form of access to music than owning albums or songs by 2016, according to a report from market researcher ABI Research.
Driven by the growing use of smartphones, ABI projects the number of subscribers to cloud-based music services will grow at an annual rate of nearly 95%, and exceed 161 million in 2016.
The number of subscribers to cloud music services is expected to top 5.9 million by the end of this year.
Sometime next year, ABI analyst Aapo Markkanen predicts, "the Asia-Pacific area will become the largest regional market for mobile music streaming."
Prices for cloud music services are expected to gradually decline as they reach mass markets.
"Forecasts of declining prices are based on the assumption that the rights-holders will lower their royalty demands," said ABI’s Neil Strother.
"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."