Music streaming continues to grow, with the number of paid streaming subscriptions on track to reach 235 million worldwide by the end of 2018, according to a new music market report from Futuresource Consulting.
“Streaming subscriptions accounted for over half of all global spend on music last year, a segment which includes packaged music, pay-per-download singles and albums, and streaming music subscriptions,” says David Sidebottom, Principal Analyst at Futuresource Consulting. “In the first half of 2018, the upward trend has continued, tipping the vast majority of key countries beyond the 50% threshold. What’s more, all this growth is not at the expense of the overall market. The momentum is fuelling expansion, with consumer spend on music growing by 10% in 2017.”
The reasons for the uptake of streaming services are service competition, growth in family plans, smart and wireless speaker uptake plus a wider, steadily growing acceptance of streaming media. Growth is predicted to rise across the globe including emerging markets. “By 2022, the number of paid music subscriptions will have grown by half as much again, with the APAC region taking a sizeable share of the total,” he added.
Spotify and Apple Music lead the pack but like Deezer, Tidal, Napster and Google Play Music/YouTube Music still present in many developed markets, while Amazon has emerged as a player particularly in the USA, UK and Germany.
Physical sales and downloads continue to decline
Download sales continue to fall, as a direct consequence of the rise in streaming music services with CD sales facing double-digit decline in most markets. Futuresource noted that ‘vinyl sales continue to post double-digit growth, presenting an oasis of revenue in the packaged media desert’. Sidebottom added, “The sands are shifting, but our forecasts show there is still a short period of growth left before the vinyl market begins to stabilise.”
Music videos still contribute to ‘Value Gap’
“Video could be a differentiator for any music streaming service,” says Sidebottom, “particularly as YouTube remains the number one streaming music service globally in terms of consumption. The integration of Google Play Music and YouTube Music has been an obvious move, but we need to proceed with caution.”
“The industry is watching with bated breath, particularly given that free music videos on YouTube are so engrained within the public’s psyche. Consumption and renumeration do not walk hand in hand. YouTube is estimated to have generated $3 billion in revenue from music videos in 2017. Our own estimates indicate that, every month, over one billion users watch music videos on YouTube. That’s equivalent to less than $3 of revenue per user, across the entire 12 months of 2017. In contrast, streaming music subscriptions generated around 20 times that figure.”
Futuresource will host its fifth Audio Collaborative conference in London on 8th November bringing together Futuresource analysts and industry heavyweights from professional and consumer audio. For further information go here.
