Partner Simon Dixon discusses how revenue generated through streaming services such as Spotify and Apple Music are set to surpass physical music sales this year.
Streaming Revenue is set to surpass physical global recorded music sales this year, according to PwC, as revenues from services including Spotify and Apple Music surpass sales of CDs and vinyl records for the first time.
Streaming revenues are projected to rise 37% to $9.1 billion in 2017, with sales of physical formats dropping 10% to $7.7 billion. Total recorded music sales are projected to rise 5.2% overall to $23.4 billion.
Streaming has largely replaced purchases of individual digital tracks and albums. In 2012 downloads accounted for 70% of global digital musical revenues while streaming made up 18%. In 2017 streaming is forecast to reach 73%, with downloads shrinking to 23% (mobile ringtones largely make up the balance in each case).
The three most streamed tracks of all-time on Spotify have all been released since April 2016 (“Shape of You” by Ed Sheeran, “Closer” by The Chainsmokers and “One Dance” by Drake). Interestingly all of the Top 50 most streamed Spotify tracks have been released in the last 5 years, reflecting streaming’s increasing dominance.
The changes in the global music market mirror changes taking place in the TV and film market, where digital streaming services such as Netflix and Amazon Prime continue to grow at the expense of DVD sales and digital downloads.