The famed English philosopher Thomas Hobbes would have approved of the music streaming industry even if he died in 1679 at the ripe age of 91.
It is the commercial manifestation of his famous though slightly depressing insight that “life is the permanent war of everyone against everyone”. And this year it is the streaming music providers who will measure success and failure in figurative body bags, according to analyst outfit Ovum.
The company is warning of consolidation in the sector this year. “Casualties in the race to become the music streaming service of choice are unavoidable. Given the amount of services offering what is essentially the same product to a limited number of customers, company closures and acquisitions are inevitable.”
Its report, 2016 Trends to Watch: Music in 2016 argues that “The shift in consumer spending towards accessing music rather than owning it is an unstoppable trend that has resulted in the one of the biggest shake-ups in recorded music distribution for a century.
That’s a big call about the sector that gave rise to iTunes, and before that Napster… and CD Roms, and cassette tapes, and vinyl.
Ovum notes that no music subscription service is anywhere near breaking even and the early participants chase scale at the expense of red ink on the balance sheet ink.
According to Simon Dyson, head of music practice and author of the report, “The recorded music sector of yesterday is quite simply that, a bygone era that is being swept away by shiny new industry players.
“Music retailers will never sell as many CDs or downloads as they did last year and so services along the music value chain that want to be part of this rapid evolution in recorded music must simply embrace the change and make access work for their business,” Dyson says.
The report flags the key trends in 2016 as:
- Streaming will drive digital music growth in 2016, but will not offset the fall in sales of CDs and downloads.
- Intense competition in the music streaming sector will result in more service casualties.
- Controversy over who benefits most from music streaming will continue to make headline news and remain a divisive issue.
Ovum also predicts that despite the increasing consumer preference for music subscriptions, there will be no growth in overall consumer spending on recorded music in 2016.
Instead it is forecasting that figures for global retail sales of recorded music will have edged down 0.5 per cent in 2015 and will fall a further 0.2 per cent in 2016.
“In 2015, subscriptions alone will account for 28 per cent of digital spending and 15 per cent of the combined digital and physical spending total. Five years ago, barely three per cent of retail spending on recorded music came from subscriptions,” according to the report.
The report also considers the impact of streaming in what are still relatively greenfield markets (in revenue terms) for the sector.
“Countries such as China and India that have long been dominated by music piracy but are so often thought of as emerging markets will start to live up to that tag. Streaming services in India are already reporting high user metrics and the early results elsewhere suggest streaming is not only guiding the recorded music industry’s future in Western countries, but is also opening doors to the less developed markets.”
“The shift from music ownership to access is not an overnight proposition and consumers will take their time to change the habits of generations. But it remains the recorded music industry’s best bet for returning consumer spending to levels not seen for more than 15 years,” says Dyson.
* This article originally appeared on B&T’s business site www.which-50.com
** For pedants, the precise quote from Leviathan is “There Is Alwayes Warre Of Every One Against Every One “
Verizon Media’s talent program has come to an end for the third year, closing with a hybrid pitch-off event for Musicians Making A Difference (MMAD). The Verizon Media Academy class of 2021, made up of 44 emerging leaders from across Australia and New Zealand media, advertising and marketing industry, were given just one hour to […]
Social purpose organisation UnLtd’s Big Games competition has raised a combined $85,000 for children and young people at risk. Running over five weeks, the competition involved 32 teams from across the advertising, marketing and media industries battling it out virtually for a chance to qualify for the Rocket League final. The tournament culminated in a […]
Stan has announced that the Stan Original Film Transfusion commenced filming in Sydney earlier this week and will premiere on Stan in 2022. Transfusion is a taut, muscular thriller starring Sam Worthington (Avatar) as Ryan Logan, a former Special Forces operative, who is battling to cope with life after the loss of his wife and is thrust […]
According to a decade of data collected by iStock, Australian brands turned to imagery depicting outdated gender stereotypes during the pandemic. Tracking the keyword ‘women’, iStock by Getty Images found that in 2020, ANZ brands and businesses reverted to gender stereotypes. Images of mothers home-schooling were used at almost twice the rate of images of […]
Schwartz Media is congratulating Maddison Connaughton on her three years as editor of The Saturday Paper. Connaughton has decided to finish up her editorship this month. “It’s been an honour to edit the paper,” Connaughton said. “The Saturday Paper is one of the brightest voices in Australian media and I have been happy to see […]
Research from EdBbirdie using Spotify data has identified the most popular songs to study to. After analysing thousands of studying and homework playlists on Spotify, American singer Olivia Rodrigo’s ‘drivers license’ came out as top song to study to. It featured on 48 study playlists, while other top songs included ‘Ophelia’ by The Lumineers, ‘Falling’ […]
Dayna Stewart is the Business Director – Digital Marketing, Media & Creative Services at The Nudge Group. Here, she discusses the challenges that come with building a successful marketing team when working remotely. Before COVID-19 changed the way businesses work, most marketing teams spent their days together in a meeting room collaborating on the next […]
The line-up for the 2021 iHeartRadio Music Festival has been announced as the legendary event returns live in Las Vegas in September. This year, the epic two-day lineup for the iHeartRadio Music Festival main stage will feature performances by Billie Eilish, Cheap Trick, Coldplay, Dua Lipa, Florida Georgia Line, Journey, Khalid, Lil Baby, Maroon 5, Nelly, […]
Shop! ANZ is calling on shopper and retail marketing professionals from all retail related disciplines to participate in the first ANZ Shopper and Retail Marketing Industry Survey in four years. This important research provides a guide of where the retail marketing industry in Australia and New Zealand has come from and what is anticipated to […]