Study: Australian spend on music to grow to $1.7b in four years
Spending by Australians on music will reach $1.7 billion by the year 2022.
PwC’s 17th annual Australian Entertainment & Media Outlook report forecasts that spending will have a compound annual growth rate (CAGR) of 5% a year.
Digital music spend will leap 10.2% from $589 million in 2017 to $959 million in 2022.
The spend on live music, including concert tickets and merchandise, is estimated to expand by 2.7% from $677 million to $775 million.
However, there’ll be an escalating move from physical formats as CDs, vinyl and cassettes. That freefalls 15.5% from $135 million to $58 million.
But music’s $1.7 billion total is relatively small (6.4%) of the total $28 billion combined spend on media and entertainment.
The report summarises: “Streaming music services have been instrumental in tackling piracy (illegal copying of digital recordings) and the industry is now focused on evolving how it goes to market to create supplementary revenue streams.
“Currently, royalty revenues to artists from streaming services are small but growing; however, they are not expected to replace lost revenues from declining physical music products.
“The live music market is predicting growth as artists work hard to leverage and monetise fan engagement.
“The advent of voice-activated smart speakers, especially in the home, will boost music-listening opportunities for Australian artists and labels.”
Earlier this year smart speakers were said to be the fastest growing item of music technology in Australia.
In May, analyst firm Telsyte reported that half a million Australian households currently own a smart speaker, up from less than 10,000 in 2016.
It predicted that three million Australian households would have them by 2022.
The Australian Entertainment & Media Outlook forecasts the entire E&M sector will expand at 3% a year.
Subscription television, including online streaming, will be the fastest at 10.1% a year.
Podcasts will also be an important growth factor for the radio industry.
PwC says the number of podcast listeners will grow in the time period from 3.5 million to 8.9 million, while revenue will take a huge leap from $5 million to $110 million.
Internet radio advertising is expected to reach $276 million from $172 million.
Terrestrial radio is up from $1.143 billion to $1.229 billion.
The $1.6 billion spend on radio will only be 8% of the entire media and entertainment spend.
The report reckons, “The resilient radio industry will find growth over the forecast period via new products and distribution channels such as podcasts, streaming, on-demand and Digital Radio Plus (DAB+).
“Consistent content and good talent still draw loyal audiences on radio’s mainstream channels, and as the digital mediums grow, so too will opportunities for radio to offer advertisers more ways to target their audiences.
“Well publicised trust issues have taken some of the shine from social media, underlining the importance of reliable channels like radio as part of a diverse advertising strategy”
The streaming video on demand (SVoD) sector will expand at 30.1%, from the current $1.35 billion to $3.16 billion in 2022.
Netflix has 3.6 million subscribers, with Stan now at 1 million and Foxtel Now at 925,000.
See the entire report here.