PwC report: Australians embracing streaming, but worst music pirates in the world

Australians are embracing the concept of digital subscription services, reports consultancy firm PwC’s Outlook: Australian Entertainment and Media 2013—2017. The arrival of services as Rdio, Spotify, Deezer and MOG led to “extraordinary growth” in 2012, the report declares. Streaming sales grew 232% to $2.7 million last year.

The report states: “Initially a relatively abstract concept, digital subscription services have quickly become a practical and often preferred way to consume music. More people are choosing to pay for access to music libraries rather than own physical recordings. We expect bundling of music streaming services to grow dramatically in 2013 towards a mass market threshold as more players enter the market. However, the market is quickly fragmenting as rivals adopt a variety of business models, which has created some confusion.”

The PwC outlook is that globally, the music industry will start to grow again in the next five years, through a combination of rising digital music sales and the strength of the live music sector. The report estimates that spending on music by 2017 will be $53.8 billion compared to $49.9 billion last year. In Australia, the 12.8% annual drop rate of the CD market (to be worth just $140 million in 2017) will be offset somewhat by the 9.7% rise by digital sales to be worth $381 million in 2017. PwC estimates digital sales are now 46.3% of the market, compared to 36.7% in 2011.

Piracy remains a major problem, with Australians illegally downloading 192 million songs in the first half of 2012 – making Australians the worst offenders in the world for illegal downloading. A few years ago, the Australian recording industry moved from costly court action against pirates, given that judges were not jailing them as a warning. It’s opted for for a mixture of education of consumers and pressurizing ISPs (internet service providers) to divulge data on offending consumers to take copyright infringement action.

PwC expects Australia’s entertainment and media market will grow 13% by 2017 to total revenue of $35.7 billion. The growth will come from spending online (up 44%) and mobile advertising (up 26%). Mobile interactive games will grow 3.4% to $1.6 billion by 2017. Film entertainment will rise by 0.4% to $2.920 billion, and pay TV by 4.1% to $4.231 billion.