Streaming Music Only Generates 1/5th the Revenue of Live Concerts…

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Streaming has a free problem. Live music doesn’t. Any questions?

PricewaterhouseCoopers (PwC) shared their annual Entertainment and Media Outlook report this morning, which highlights some interesting projections. DMN takes a closer look at the forecasted figures.

The report shows that total music revenue in the US is predicted to hit $18.04 billion by 2020, which is stimulated by the growth in the music streaming market.  With digital downloads predicted to decrease at a compound annual rate (CAGR) of 14%, physical declining 12% and mobile music evaporating 23%, the only other factors driving the US music industry are live music and streaming (with a little push from vinyl).

Of those three, concerts remains the clear breadwinner, possibly forever.  Over next few years, total live music revenue in the US is predicted to grow 4.7 percent at a compound annual rate through 2020, fueled mainly by ticket sales.  This is steady, healthy growth, though streaming is the clear leader when it comes to acceleration.  The format is is predicted to enjoy steady growth of 21.7 percent through 2020 (also CAGR), hitting $4.2 billion in that year.

All of that is intensifying debates over whether the streaming music business model is good for the music industry, or whether it is in fact harmful.  The more romanticized, tech-happy version is that on-demand access is disrupting traditional music sales, though piling reports and statistics suggest that platforms like Spotify and YouTube simply cannibalize physical formats and digital downloads while subtracting overall revenues.

That is forcing more artists to shift towards live experiences, given paltry revenues generated online.

In the streaming world, the giant problem is that unpaid formats are currently commanding the greatest uptake.  Of course, the whole ‘free vs. paid’ debate doesn’t exist in the live music sector, simply because fans are willing to pay huge ticket prices for a show.  Even if they’re streaming the artists on stage for free.

2 Responses

  1. pwillco

    And fans will pay out the arse for anything with the musician’s logo on it, too.

  2. Chris H

    Again, this all comes down to supporting blockchain to revive the sales market. It’s there in black and white (and bleeding red).