Australian streaming tipped to plateau but global music industry will continue to grow

Australian streaming tipped to plateau but global music industry will continue to grow

According to new studies.

Australian record companies are expecting that the rapid take-up of streaming by Aussie consumers will see the local industry grow. ARIA figures for the first six months of 2018 found subscription revenue leapt up by 35.1% to $105 million while ad-supported streaming revenue went up 31.9% to $12.7 million. It was a substantial portion of the entire music industry’s revenue of $195.6 million for the six months. It comes in the wake of double-digit growth in the whole of 2017, the biggest jump for the local music industry since 1996. At the time, ARIA chief Dan Rosen said streaming and the explosion of smart speaker sales would continue the industry’s momentum growth. But there’s a dark cloud on the horizon. A new report from MIDiA Research warns streaming in Australia and other mature markets as the US, UK, Sweden and Netherlands will start to plateau in 2019. Global streaming revenue will still grow by another US$2 billion to 2025 because of continued expansion in larger markets as Japan and Germany, and mid-tier markets as Mexico, India and Brazil.

Australia is currently #10 on the global music streaming (and #8 in terms of global revenue). MIDiA’s prediction is that the current biggest streaming market in the world, the US, will still be at #1 in 2025. It will double its subscriber numbers to 90.1 million. The streaming services will find new ways to get more US subscribers, aiming at mainstream and older audiences. The UK will most likely retain its #2 streaming spot in 2025 and the large markets as Germany and France will also be up there. But it’s not known where Australia will be on the Top 15 list then, if at all. New markets as Brazil, India, MENA (Middle East & North Africa) and China will be entering the ranking.The global streaming market will grow from $19.6 billion in 2018 (in retail terms) to $45.3 billion in 2026. This means the market will more than double. Fuelling this will be rising publishing related rates, increased share of royalty pot going to non-music content, increased share of royalty pot going to non-label music and potential long-term future label rate cuts (e.g. relief for price hikes).

MIDiA Research showed that in 2018 streaming became the majority of label revenue (51%) for the first time. MIDiA managing director Mark Mulligan added, “The market will always need labels, but what constitutes a label is becoming a fluid concept. And in so becoming, it may put us on the verge of the biggest shift in record label business models since, well, ever.” In an aside, Mulligan said that in 2018, Artists Direct gained the most market share. This, he says, could be where the market is heading. “The range of tools now available to an artist are more comprehensive than ever before, while deal types that labels are offering (e.g. label services, joint ventures) are changing too. Artists are effectively able to custom-build the right model for them.”