BACKGROUND MUSIC MARKET ANALYSIS

Background Music Market Size and Trends

The global background music market is estimated to be valued at US$ 24.13 Bn in 2024 and is expected to reach US$ 38.41 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 6.9% from 2024 to 2031.

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The background music market is expected to witness significant growth during the forecast period. The increasing commercial applications of background music are driving the market growth. Background music is widely being used in retail stores, businesses, elevators, and public places to create a certain mood or atmosphere. It helps in improving customer experience and engagement. Moreover, the growing demand from emerging markets like Asia Pacific is expected to create new opportunities for market players. However, the availability of free and pirated music content online may hinder the market growth to some extent during the forecast years. Nevertheless, innovation brought by new technologies like AI/IoT integrated solutions is likely to aid the expansion of the background music market.

Background music stimulates the consumer mindset

Having music playing in the background of retail stores and public spaces subtly influences shoppers and patrons. Studies have shown that background music helps put consumers in the right frame of mind to spend more time browsing items and makes them more receptive to sales promotions. Pleasant, upbeat sounds create a relaxed and comfortable mood inside locations. Consumers stay longer which increases the chances they will find something to purchase. Background music also masks other ambient noises that could be distracting or unpleasant. The right music selection plays a role in enhancing the shopping experience and adventure of discovery.

Many retailers have learned that playing popular hits from certain eras can trigger nostalgia and memories in their customers. This elicits positive emotions that transfer over to how patrons engage with the space. Nostalgic background music serves as a subtle marketing tool to connect with clients on a personal level. It forges an emotional link to the brand without being overt or salesy. Carefully curated playlists leverage the psychological power of music to manipulate mood and behavior. The result is customers who spend more time in stores with higher average transaction sizes.

Market Concentration and Competitive Landscape

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Background music builds brand personality

In addition to influencing shopping mindsets, background music shapes how customers perceive a brand. It allows companies to subtly express their values and priorities without being overtly promotional. The right music profile builds an emotional connection between patrons and the business identity. General genre choices like jazz, classical, or modern hits convey a sense of atmosphere that clients come to associate with an establishment. Over time, this builds brand familiarity and a sense of what to expect from that company.

Many retailers use music to reflect their target demographics and ideal customer profile. Coffee shops curate acoustic guitar or piano playlists to portray an image of relaxation.

Key Takeaways from Analyst:

One of the key drivers for this growth will be the increasing establishments of cafes, restaurants, bars and retail stores worldwide. Proprietors are recognizing that playing softly in the background can positively influence customers’ moods and spending habits.

North America currently dominates the background music market due to high saturation of establishments that play music. However, Asia Pacific is expected to emerge as the fastest growing region on the back of rising affluence, urbanization, and establishment of modern retail outlets especially in China and India.

A restraint to the growth could be small businesses or proprietors opting to use free music streaming services instead of paid background music services. Copyright issues may also limit expansion if laws are not followed.

Opportunities lie in tapping Tier 2 and Tier 3 cities in developing economies. Verticals outside of retail such as healthcare facilities, salons and spas also present an untapped market potential for background music services. Newer technologies such as streaming and customized playlists can boost revenue streams from existing customers.

Background music providers must raise awareness about the impact of music on consumer behavior and spending patterns.

Market Challenges: Availability of free music sources

The availability of free music sources on the internet is presenting a significant challenge for the growth of the supply background music market. Many business establishments that would benefit from background music in their stores and offices are reluctant to invest in paid subscriptions or licenses when there is readily available free music on platforms like YouTube. While free music was earlier only available through questionable means, today many artists are choosing to put their work on channels like YouTube without restrictions on commercial use.

This has made it very easy and inexpensive for businesses to simply play royalty-free music playlists or radio stations available on YouTube. They can easily curate compilations of ambient, jazz or other suitable genres and let it play continuously without having to worry about copyright issues. Some businesses are also creating their own private playlists and channels instead of investing in licensed services. While this allows cost savings for businesses, it is severely limiting the scope for dedicated background music providers to expand their customer base and generate higher revenues.

Market Opportunities: Emergence of on-demand music services

The emergence of on-demand music services has opened up new opportunities for growth in the supply background music market. With on-demand streaming, businesses have access to vast music libraries containing millions of songs that can be tailored to suit their branding and audience. They can easily create customized playlists without having to invest in purchasing individual tracks or albums. This offers unprecedented flexibility and cost savings compared to traditional methods of supplying background music through physical media or satellite radio subscriptions.

On-demand services allow background music to be targeted according to location, time of day, and customer demographics. Playlists can be dynamically updated based on real-time data and analytics. This hyper-personalization ensures that the music is always aligned with the mood and vibe of the business premises. Various sensors and IoT devices are also being utilized to sync music according to customer footfall, energy levels, and ambient conditions. 

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Insights By Component: AV System contributes the highest share of the market owing to its widespread usage across industries

The AV system segment within the global background music market is expected to contribute 59.2% share in 2024 owing to its ubiquitous presence across various sectors. Unlike music streaming which requires an internet connection, AV systems can play background music independently without any online dependency. This makes it a more reliable option for places which may have intermittent network access. Furthermore, AV systems allow more control over the type of music being played as businesses can custom curate music playlists based on their brand image and target customers.

AV systems are ideal for large commercial spaces which require background music to be heard throughout their premises. Retail stores, shopping malls, airports, and other public areas widely utilize AV systems to enhance the customer experience during visits. Well-designed systems with high quality speakers can evenly distribute music across vast areas. This ensures consistency in ambiance and brand recall. Healthcare facilities also benefit from AV systems as background music is proven to reduce patient stress and aid recovery. Control rooms even customize playlists for different sections like patient rooms, waiting areas and operation theatres.

Offices and coworking spaces have significantly contributed to the growth of AV systems in the background music market. As more companies adopt flexible working and open workplace culture, there is increased focus on interior acoustics and sound proofing. AV systems with zones and specific volume controls allow concentrating music in common areas while maintaining silence in private cabins when required. Their installation cost is also justified in large corporate campuses given return on investments in terms of improved productivity and employee satisfaction.

With steady automation across industries, AV systems integrated with IoT will open newer opportunities. Voice command options, smart volume adjustments and wireless technologies will make background music even more seamless and ambient and drive further adoption of AV systems globally. Their market share is expected to remain high owing to unique advantages in diverse commercial segments.

Insights By End User: Hospitality contributes the highest share of the market owing to strategic importance of ambience and customer delight

The hospitality segment is expected to account for 38.1% share of the global background music market in 2024. Creating the right ambience through senses like sound plays a critical role in the hospitality industry. Background music allows establishing a consistent brand image and tailored atmosphere wherever customers are experiencing the venue. It subtly influences their perception of quality and value for money without being intrusive.

Hotels leverage background music strategically to elevate different customer touchpoints. Live nor recorded music sets distinct vibes in lobbies, lounges, dining areas and rooms. Carefully curated playlists keep guests engaged throughout their stay. Background scores are also used in banquet halls and event spaces to complement the mood. As standalone restaurants and cloud kitchens burgeon, many differentiate their dine-in experience through signature tunes. Pubs and bars utilize background rock, hip-hop or jazz as appropriate to draw younger crowds.

Research shows suitable background music is proven to increase bills by evoking positive emotions and prolonging customer visits. It is a cost-effective way for hospitality brands to boost revenues without needing live performances. Background music tailored for different times of the day also helps operating hours run smoothly. Its ability to subtly manipulate behaviors makes it invaluable to the factors driving occupancy rates, repeat visits and overall customer satisfaction in the highly competitive hospitality domain. This cements it as the leading end user segment for background music globally.

Regional Insights

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North America has emerged as the dominant region in the global background music market. The region is expected to account for 37.5% of the market share in 2024. The region is home to several large multinational music licensors and radio networks that broadcast background music playlists. These companies have established extensive licensing agreements with businesses across various industries like retail stores, restaurants, and public venues to play curated music formats without interruption or DJ voiceovers. Moreover, North America boasts a highly developed commercial real estate infrastructure that has embraced background music as a tool to influence customer moods and perceptions within their premises. As a result, categories like supermarkets, departmental stores, and malls in the U.S. and Canada have the highest deployment of background music systems.

Asia Pacific, on the other hand, is witnessing the fastest growth and has become an important revenue generator within the global background music market. Rapid urbanization and consumerism has led to the proliferation of organized retail and eating outlets across countries like China, India, and Malaysia. Background music providers are leveraging this opportunity by pitching curated audio solutions tailored for the regional tastes of customers and languages. Moreover, rising disposable incomes have made businesses willing to invest in atmospheric elements like background music to enhance customer experience. Certain nations in Southeast Asia like Vietnam and Indonesia are experiencing exponential growth in the development of malls and commercial hubs. Background music providers are partnering with real estate developers in these markets to install customized music solutions during the planning stages itself.

Market Report Scope

Background Music Industry News

• In April 2024, ai, India's first and only AI-backed, new age, web-based disruptive music tech startup, developed an AI-powered platform that enables podcast, video, and game creators to generate unique, royalty-free background music for their commercial content. The platform, which was founded by Mansoor Rahimat Khan and Siddharth Bhardwa, offers a range of innovative features that empower creators to produce high-quality music. Through Beatoven.ai's web-based application, content creators can create and customize tunes with the help of the platform's vast and varied library of mood-based tunes spanning multiple genres.
• In September 2023, USEN Corporation, a leading Japanese media and telecommunications company, will partner with TTNE Co., Ltd., a manufacturer of saunas and sauna-related products, to begin distributing three original music channels targeting sauna facilities and home sauna rooms. The channels will be themed "Sauna Tomote*1 Music", providing curated musical content to enhance the sauna experience for users.
• In March 2023, Mood Media, the world's leading experiential media company that maximizes the Customer Experience and provides value for businesses and brands worldwide, acquired Vibenomics, the leading in-store digital advertising solution provider. The financial terms of the transaction were not disclosed.
• In November 2022, USEN-NEXT HOLDINGS, a leading provider of entertainment and media solutions in Japan, and Recochoku, the country's largest music distribution platform, collaborated to launch WEDDING MUSIC BOX. This comprehensive web and mobile application-based background music (BGM) service package was designed to simplify the management of music for wedding ceremonies and receptions.

*Definition: The global background music market includes companies that license and distribute commercial music for use in public and private spaces. The background music is intended to be subtle and unobtrusive, playing in the background of places like retail stores, restaurants, fitness centers, offices and other locations. The background music helps set ambience and can influence customers' moods and behaviors. It covers a variety of music genres tailored for different types of businesses and intended environments.

Market Segmentation

• Component Insights (Revenue, US$ Bn, 2019 - 2031)
  • AV System
  • Music Streaming
•  End User Insights (Revenue, US$ Bn, 2019 - 2031)
  • Retail
  • Healthcare
  • Corporate
  • Hospitality
  • Fitness and Recreational Sport Centers
  • Spas & Wellness Centers
  • Beauty & Hair Salons
  • Others
• Regional Insights (Revenue, US$ Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • South Africa
    • Rest of Middle East & Africa
• Key Players Insights
  • Almotech Media Solutions
  • CSI Music
  • Easy on Hold
  • Express Melody
  • Imagesound
  • Mood Media
  • NSM Music Group
  • Pandora for Business
  • PlayNetwork
  • SiriusXM for Business
  • Sunflower Music
  • TouchTunes
  • Usen Corporation
  • Mood Media
  • PlayNetwork