Global music industry to be worth $49b this year, says PwC report
According to PwC’s 2017 Global Entertainment and Media Outlook forecast, total music industry revenues will grow for a fourth consecutive year to US$49 billion this year.
The global music industry’s two strongest assets, and the reasons for its turnaround, have been its ability to finally read correctly what consumers want from their music experience, and getting technology to deliver it for them.
The figures combine recorded and live music revenues – and with growth fuelled by the explosive take-up of streaming and consumers’ greater excitement over live music events.
Recorded music sales will rise 5.2% to $23.4 billion in 2017, estimates PwC.
Streaming revenues will rise 37% to $9.1 billion, while sales of physical formats will drop 10% to $7.7 billion.
By the end of this year, streaming will be 73% of global digital music revenues while downloads constitute 23%. Just five years ago, these positions were virtually reversed.
2017 will be the year where on an international scale, streaming revenue will overtake physical.
“The growth of streaming reflects how it’s become a preferred business model and user experience for most consumers,” PwC’s Christopher Vollmer told the Financial Times.
“They like the combination of on-demand access to content [and] they like the convenience of having the jukebox in the sky that has been realised because of widespread broadband availability.”
While music markets as the United States and Australia have seen digital exceed physical, Japan and Germany – the second and third largest markets – still have CDs as the formats of choice by their consumers.
But now streaming is making serious inroads in those countries.
The music industry is not alone in this shift in consumers’ preferences from ownership to subscription, PwC said.
Global internet video revenue will overtake DVD and Blu-ray sales for the first time this year, to $24.7 billion. SVOD is expected to grow 11.3% CAGR to $14 billion in 2021 in the United States alone.
“The habit of renting entertainment content rather than the traditional one of purchasing it has clearly caught on,” PwC said.
The outlook expects the global entertainment and media sectors grow revenues from $1.8 trillion in 2016 to $2.2 trillion into 2021, representing a compound annual growth rate of 4.2%.
Last year PwC had expected a growth of 4.4%, which indicates it is realising that some sectors like film and pay TV are starting to plateau.
The report forecasts huge growth to come from virtual reality (68 million VR headsets in the US by 2021), video games (up from $21 billion last year to $28.5 billion in 2021 in the US) and e-sports (tripling in five years).
Declining will be revenue from DVD and rental, and traditional TV and home video.
For Australia, PwC forecasts media and entertainment hitting A$43.7 billion by 2021. Of this $26.4 billion will be spent on streaming services, interactive games and newspapers.
Music, live and recorded, will grow at a rate of 3.7%. It will be exceeded by the growth of interactive gaming (4.8%) and pay TV (3.8%) but beats radio (2.3%) and movies (0.7%).