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News July 20, 2022

Australian Music Industry Only ‘Relatively Healthy’ Says PwC

Australian Music Industry Only ‘Relatively Healthy’ Says PwC

The Australian music industry is doing okay, but its future looks bright.

As Australian consumers become more attuned to paying for their entertainment and media services, spending rates in some sectors are returning to pre-pandemic levels.

PwC’s latest Australia’s Entertainment and Media Outlook, published this week, shows that in 2021 the total sector jumped 10.45% to reach $65.3 billion. 

It forecasts a compound annual growth rate of 4.1%, reaching $79.9 billion by 2026.

The two biggest spends were on subscription TV ($4.3 billion) and gaming ($3.6 billion). Both are expected to have the greatest growth in future years.

Spending on music was close to $1.2 billion, ranking it at No.5.

Above music were books at around $2 billion and films at No.4 at about $1.4 billion.

The Australian music industry is described as “relatively healthy”, with a 13.8% growth in 2021 and a an 11.2% rise tipped over the next five years to $2.3 billion.

A positive for spending is how fans are finding new ways to consume and discover music, led by TikTok, with sub-genres reaching demos that normally wouldn’t have been exposed to them.

PwC director Dan Robins, the editor of the report, told TMN the obvious problem for music is gigs and tours are yet to reboot in earnest.

“There was a 130 per cent bounce back (in 2021),” he said. “But $150 million is still way below the near-$700 million before the pandemic, so that will take time to come back.”

“There probably is some pent-up demand from the consumer, but rebooking international artists has a longer lead-time.”

Music streaming continues to head towards saturation point, but last year’s revenue from ads and subscriptions still saw it generate near $1 billion.

 “Music streaming showed pretty solid growth – 60 per cent in 2019, and another 18 per cent in 2020.

“We still have an 8% and 12% in the forecast for this year and next.”

By comparison, PwC Global’s June report projected international live music revenue to exceed pre-pandemic levels in 2024, with recorded music revenues expected to rise from US$36.1 billion in 2021 to $45.8 billion in 2026.

The Australian report’s Listen section covers Live and Recorded Music, Terrestrial and Streamed Radio, Podcasts and Audiobooks.

It summarises, “The year 2021 proved that the listening behaviours adopted during the COVID-19 pandemic are cemented in Australian society.”

PwC identifies seven defining factors for Australian entertainment and media growth through 2021 and into 2022.

Among them are “return to and Premiumisation of in person – live entertainment increasingly competes against home-based channels to gain share of the consumer wallet and is working ever harder to entice consumers off their sofas.”

Social gaming grew from 21%  of consumers spending (excluding access) in 2017 to 26% in 2021 and is tipped to be close to 30% as it becomes more mainstream.

“In-game advertising reached $1.3 billion in 2021 growing 8.8% and presents itself as an opportunity area.”

Companies are investing in new metaverse experiences “and, though definitely nascent, NFTs have the potential to put power and control over rights and assets back into the hands of creators.”

Growth is expected to come from Subscription Video on Demand (SVOD) as Australians now manage 6.5 premium subscriptions from over 100 across video-on-demand, audio, news and lifestyle content, gaming and other sources of entertainment.

PwC

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