Streaming doubles acceleration of Aussie music industry growth
Wholesale revenue for the Australian music industry grew for a third consecutive year in 2017, largely fuelled by paid streaming subscriptions.
According to figures released this morning by the Australian Recording Industry Association (ARIA), the industry was up 10.5% to $391 million.
This was the largest increase the industry has experienced in its annual wholesale figures since 1996.
In 2016, the industry’s growth was pegged at 5%.
2017 was the first year that revenue from music streaming services (at $213 million) accounted for over half (54%) of the overall market.
The streaming category now includes income from subscription services (such as Apple Music, Deezer, Google Play, Tidal and Spotify) and other non-subscription on-demand streaming services (such as YouTube and Vevo).
Breaking down the figures, subscription service income was $169.5 million (up 54.8% from 2016), ad-supported streaming models provided $19.4million (up 64.3%), and revenue from video streaming was up 47.6% to $23.7 million.
ARIA called this “a remarkable performance given the revenue from this segment of the market was negligible just five years ago.”
Streaming is of course counted as part of digital figures, up 19.7% to total revenues of $294.5 million.
Digital albums fell 27.6% to $38.5 million, and digital tracks dropped 24.6% to $31.1 million.
Physical product (CD and vinyl) still make up a healthy 25% share of the Australian market.
The vinyl renaissance continues in this country, growing for the seventh consecutive year, increasing by 19% in 2017.
In comparison, in the United States last year, streaming made up 62% of the market in the first half. CDs were down 3% and vinyl up 3%. Vinyl albums comprised 29% of total physical shipments at retail value – their highest share
since the mid-1980’s.
Denis Handlin AO, ARIA chairman and chairman and CEO of Sony Music Entertainment Australia and New Zealand, was enthusiastic about the positive results released today — and warned that protection of copyright was essential to maintain that growth.
“We are delighted to see the industry in such a positive growth path and that this strong 2017 result follows the increasing revenues over the past two years.
“The industry continues to transform and change at a rapid pace and the results are a credit to the continued high quality work, innovation, development of local artists, as well as to the industry’s tenacious approach in marketing and delivering music to fans across the country.”
He added that although the music industry is now on a pathway to recovery, it’s absolutely critical that Australia retains a strong copyright framework to ensure that artists and labels can protect their work and earn their fair share in the growing digital market.
ARIA CEO, Dan Rosen was also optimistic about the future of the local industry:
“The return to growth of the Australian recording industry is a wonderful story of resilience, hard work and innovation,” he described.
“Music fans today can access their favourite artists across a multitude of formats from vinyl in their local record store to streaming services on their phones and smart speakers.
“Our business will continue to evolve, and we must remain vigilant to ensure that the growth is sustainable in an increasingly global and digital marketplace.”
The growth of the local music industry depends on how successfully streaming services can draw in more paid subscribers.
Currently, 4 million people in Australia and New Zealand – or one in eight Australians – are monthly subscribers to a streaming service, according to figures late last year from APRA AMCOS.
Australian and New Zealand artists earned $62 million in royalties from streaming in the year to date, a 127% rise.
The challenge now is to address the fact that while most of the streaming services are similar, their payment to artists varies wildly.