Music Making Software and DAW Software Industry Study 2019

Digital Transformation Study: Growth of Music Making Software Market
Digital Transformation and User Experience are central fields of action of the international Music Making and Software Industry.

Music Software

Market growth
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Strongest market growth of 31% in Early Explorer market segments - Music Making Software market splits up

Digital Transformation and User Experience are the central fields of action of the international Music Making and DAW Software Industry. As part of a representative study by the Brand Science Institute, around 3,800 users from the largest music making software producers in the USA, Europe and Asia (China) were examined in a triangular study design.

The study focused on the perception and achievement of different customer segments, customer needs and motivators of digital services and products as well as their growth drivers. The focus was not only on the different contact points such as websites, eCommerce shops, apps and how-to tutorial platforms, but also on the holistic view of different software ecosystems and their growth characteristics.

The international music software market can be divided into four central market segments within the scope of the study and on the basis of significant cluster values:

Early Explorer, Full Engager, Passionate Fan and Professionals. The Professional Market can in turn be divided into three different levels of professionalism, but was viewed holistically.

The largest growth since the last study in 2018 has been measured in Early Explorer markets. Central growth drivers of this user group are a distribution of 22% convenience, 35% simplicity, 19% speed and 24% instant gratification. Price readiness for music software applications in Early Explorer markets was measured at $8.50 on average.

Previous assumptions that the growth of the Early Explorer markets would lead to greater growth of downstream customer groups such as Full Enganger and Passionates fans could not be confirmed. Rather, Early Explorer user groups are deepening with their readiness to use ever new software apps and programs on mobile devices such as smartphones and tablets. Cross-elasticity with other software development applications is around 67%, with Early Explorer in particular benefiting from the combination of music software and other software services such as video and image editing programs. Early Explorer is thus increasingly isolating itself from the overall market and interrupting growth in downstream market segments by approx. 27% per year.

With about 71% Early Explorer user groups are driving the formation of software ecosystems of horizontally interconnected software products. By comparison, the benefits of ecosystems in classic Passionate Fan and Professional groups are only 9%. The central usage hub within these groups remains the music making software and mostly special usage programs.

Compared to other user groups, the Early Explorer market is growing the fastest internationally with around 31%. At the same time, significant differences in the characteristics of the user groups could be observed. Early Explorer is paying more attention to the support of artificial intelligence when using software products, while downstream user groups attach great importance to learning the software.

The groups from full engager to professionals still represent the largest market and represent the total market with a total of 64%. At the same time, this cluster was able to show shrinking tendencies for the first time due to a negative growth in the professional market of -8%.

Overall, this circumstance suggests that there will be a lateral shift in the music software market paradigm and that ecosystems of fragmented software applications controlled by AI will increasingly dominate the market. The strict idea of monotonous and successive usage levels can thus be rejected in principle.

For traditional user groups, learning is one of the biggest hedonistic self-portrayal drivers, accounting for around 71%. The efforts of the largest music software manufacturers to build up ecosystems within the existing user groups are undermined by the fundamental trend of learning the software and only have growth potential of 11% in the combination of How-Tos and software.

The increasing fragmentation and complementarity effect can be quantified at around 41%, with US American and Chinese user groups in particular shaping the market for music software apps. This leads to the entry of various start-up initiatives and software packages from outside the industry. The local market potential in the Early Explorer groups is estimated at around 5 billion dollars, which is not least due to the high cross-selling potential.

AI and anticipative software programs remain central drivers of usage frequency and are still described by 63% as worthy of revision. The high degree of software requirements is determined by companies such as Google and Apple. Only 11% of traditional music making software vendors concentrate on the analysis, evaluation and provision of usage data.

Progressively, the market for music making software will in future be determined by Early Explorer, while the professional market will continue to show shrinking tendencies. The Early Explorer market will be characterized by different levels of user behavior and will represent a completely separate and detached market. A complete decoupling from traditional software models can take about 8 years.

About the Music Making Software and DAW Software study:

In a first step, central motivators of the different user groups were identified on the basis of qualitative data as part of a triangular study design. At the same time, the individual user groups were examined more closely on the basis of their stability of user clusters. On the basis of explorative analysis models, the digital measures and behaviours of providers and users were examined in more detail. With the help of trend explorative models, the different effects on the market were examined in more detail. A quantitative follow-up study was carried out to validate the data.

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