Glenn Peoples for Billboard reports (here) on new research coming from MIDIA: “Global Music Forecasts 2014 to 2019: The Shift to the Consumption Era”.
Unfortunately the revenue of the music business will continue to sink into 2019 throughout the world market. The revenues from digital sources (downloads, streaming, ad-supported models, etc) will continue to increase its share but the overall revenue pie will shrink. This is primarily due to the lower profitability of the newer digital products. The report predicts a further shift in the music business as distributors, labels and artists retool to adapt.
From a royalty processing standpoint, this research shows that the accounting for these complex, low-revenue, high-transaction volume products will continue to be a challenge to content companies. New markets will open as well, further forcing the globalization of content management.
“As the report notes, streaming services have achieved the highest penetration in countries that had little success with downloads. Take Sweden, a country frequently hailed for its adoption of subscription services. Downloads never accounted for more than 8% of Swedish recorded music revenues. In contrast, the download peaked at 43% of U.S. revenues. Other factors will play a part in how markets evolve: piracy, per-capita music spend and GDP, and the adoption of mobile devices and other technologies.”