It should come as no surprise that the music streaming market size is growing. In 2025, the music streaming market size was calculated at $47.06 billion, and it is forecast to reach around $148.89 billion by the year 2032. This explosive growth can be attributed to the rising consumption of digital music across several devices, enhanced internet connectivity, rising demand for smartphones, and faster data networks. North America is anticipated to continue to lead this global industry due to increased use of music streaming for social interactions and a strong presence of global streaming platforms such as Spotify, Amazon Music, and Apple Music.

In addition to North America, other areas expected to experience fast growth in 2025 include Asia Pacific and emerging markets such as China and India. The global penetration of smartphones in the communication market, and rapid spread of access to high-speed internet, has meant that traditional media sources such as CDs and vinyl’s have been replaced by music streaming platforms. According to the International Telecommunication Union, or ITU, about 5.5 billion people were using the internet in 2024, and music streaming services have given them instant access to millions of songs.

Even though the future of music streaming remains promising, piracy continues to be a major problem in underdeveloped and developing countries around the world. In places like India, many people still use unauthorized streaming apps and various websites to access music for free. Music streaming is nonrivalry, so many people can simultaneously obtain the benefit from the same good without impacting the availability of benefits for others, and piracy makes it hard for the music industry to exclude non-paying customers. These characteristics, which economics refer to as a public good, lead to market failure as “free-riders” are reduces the legitimate revenue for digital music platforms and the artists themselves. That and a lack of reliable internet infrastructure in some low-income regions also attributes to limiting overall music streaming market demand. 

Discussion Questions:

  1. Describe the characteristics of private and public goods and provide a few examples related to the music industry.
  2. Discuss the effects of “free-riders” on a market such as music streaming and describe why this is considered a market failure.