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Streaming revenues growing fastest, though overall music spending still declining

By | Published on Thursday 16 August 2012

Strategy Analytics

Streaming music services around the world should generate £696 million for the global music industry this year according to new research by Strategy Analytics. That would be an increase of 40% year on year, making it (unsurprisingly) the fastest growing strand of the recorded music market.

Download sales are also still increasing according to the stats report, and should be up 8.5% this year. Meanwhile, physical product sales continue to slump, of course, down 12%, though overall CDs and such like still account for 61% of music sold worldwide. The 50/50 physical-to-digital domination switchover may have happened in some territories, but not on a global level – though Strategy Analytics reckons that it could happen on that scale in 2015.

Obviously, that streaming services, which generate most of their revenues via subscriptions, are growing most rapidly in the digital music market is no secret, as the long mooted ‘access’ approach to online music finally gains traction, so called ‘ownership’ services, ie download stores, having dominated in the early days of digital. Though some cynics might note that a sizable portion of the money being paid over to rights owners by streaming firms still originates from start-up capital or advances from technology partners, and it remains to seen if such high levels of royalties can be sustained once that money runs out.

Anyway, those are the breakdowns, but what about music spending overall? Bad news there, spending on recorded music is likely to be down 2.6% this year overall, and 16% down in the UK, says Strategy Analytics. Though whether that slide is part of the ongoing contraction of the recorded music market that has been occurring ever since the shift from physical to digital began, or a reflection of the shaky economic climate, or of a slow release schedule, it’s hard to say. Probably a combination.

The BBC quotes Strategy Analytics’ Ed Barton as saying: “The extent of the decline took us a bit by surprise. The quality of the release slate was simply not desirable enough to drive the levels of spending we’ve seen in previous years. Maybe something will come along – even one of the compilations of songs from the Olympics ceremonies – which will give us something to shout about going forward”.



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