If you enjoyed last sessions guest speaker (see more videos of Awolnation’s Sail in a BMW Olympics commercial and a user-generation clip for the all electric i8) and have further interest in the music industry, I’d like to give you some deeper insight into how the transition of the music industry from physical to digital is impacting industry revenues.
Digital is fast replacing physical records in the US, the largest music market with about 30% share in global recorded music revenues. Digital currently accounts for roughly 60% of recorded music revenues in the US.
Globally, total music revenues have fallen sharply to $ 15 billion, but the share of digital music revenues has increased to almost $ 6 billion. The strong growth of digital is driven by tremendous growth in ad-supported subscriptions (+367% in five years) and ad-supported streaming (+293% in five years. These two business models now account for 27% of digital revenues, up from 9% five years ago.
Given these growth rates, the industry is highly dynamic with the dominant internet players (Google, Apple, Facebook, Amazon) all interested in grabbing their share of the market. Despite still low profitability and a needed critical mass of subscribers, we can expect new players with strong financial backing (Amazon, Deezer, Asian players?) to enter the market. Further consolidation, like Apple buying Beats, is also on the horizon.
What’s your favorite digital music channel and why?
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