The US music industry is now worth $17.2 billion, according to data calculated by PwC. And more than half of that is coming from concerts.
Streaming is exploding. But a majority of the revenue in the music industry is coming from live events. According to US-based calculations shared by PwC with Digital Music News, ticket sales alone account for 43% of all revenues, with festivals driving the growth. Big brand sponsorships at events count for another 12%.
In total, the US-based music industry is now worth $17.2 billion, up nearly 11% since 2012. That’s fantastic news, especially for those focused on live events, streaming services, and vinyl. Other sectors are bleeding, most notably CDs and music downloads. Indeed, it’s entirely plausible that both will become rounding errors within 5 years, with downloads potentially facing extinction.
+ Music Industry Executive Predicts a Major ‘Wake-Up Call’ on Streaming
Enter the new trifecta, with each booming sector feeding the other. A surge in streaming seems fortuitously connected to a thriving festival industry. And despite its vintage nostalgia, streaming is also theorized to be powering an 11-year LP resurgence.
It’s all a happy infinity loop of growth. So let’s break them down.
Undoubtedly, streaming has now entered explosion mode, with year-on-year growth at 99.1 percent according PwC number-crunchers. “Digital music streaming revenue was up a quite astonishing 99.1% year-on-year in 2016 to total $3.0 billion,” PwC relayed.
“Music streaming revenue is now forecast to rise to $7.4 billion in 2021.”
That calculation does include mega-winnings from Wall Street IPOs. Though in-fighting among Spotify executives may be confusing the timetable, Spotify is widely expected to mint billions in a heavily-watched IPO as soon as next year.
Meanwhile, vinyl remains robust but stunted. Thanks to legacy manufacturing issues, vinyl production is severely stunted at this stage. Even major labels are suffering manufacturing delays, and some plants are outright turning down orders from indies and unsigned artists.
“One hurdle vinyl has yet to overcome is the pressing industry’s capacity issue, which continues to cause order bottlenecks,” PwC relayed. “The majority of US presses are some 40 years old and in need of refurbishment; the sector needs new plants to come onstream. One notable new entry this year is artist Jack White’s Third Man pressing plant in Detroit, a 10,000-square-foot facility with a set of eight brand new machines capable of turning out 5,000 vinyl units in an eight-hour shift.”
Others are also innovating against this problem. That includes Vienna-based Rebeat Digital, whose HD Vinyl technology promises to solve a serious supply-side gut. And, foment a serious explosion in vinyl in the process.
Back to the concert biz, perhaps the real wildcard here is terrorism. Across the pond, terrorist attacks have hit concerts. That includes a suicide bombing at a recent Ariana Grande concert, though the long-term impact on concert attendance remains unclear.
Stateside, the problem remains tame, and will hopefully stay that way.
add to this the continuation and growth of the Philips compact
National Audio Company, a cassette manufacturing business in Springfield, Missouri, and one of the last and definitely the largest
remaining manufacturers of the classic audio cassette tape.
What would it look like if merchandise sales (t-shirts, etc.) were included?
It would be interesting!
As independants artists, our major revenues stream are concert tickets and merch. Very little to none on recordings may it be streaming or download. I wonder how the rest of the world is doing
As an independent artist, the bulk of my income is selling downloads and streaming. 50% from downloads, 25% from streaming, and about 12% merch, 12% shows – and that’s a livable income, BTW.
They have to be missing at least a billion dollars in merch from this report
And 95% of concert and streaming cash goes to FEW LUCKY stars that are part of UMG invented hunger games!
Make music a merchandise again and we can have $300B music industry with single tune rising star making $50 million in first week after global release.
Time to ask to Larry Page to lock music in virtual walls and start $300B harvest that will double Google in 5 years!
You type on basically the same subject every time. This time you made a little more sense.
It really shouldn’t be hard to remove everything you want from youtube and spotify and any other place that doesn’t pay as much as you’d like.
There has to be some rock star rich enough to say “I don’t need the 1/10th of a penny I’m getting for a youtube stream, I’m going to take all my content, put it on this other website, and start asking for jukebox prices. I’m a huge rockstar, super rich, and I don’t really have to reach new people. They already know me, what I want is to create / support something new that will allow me to get a dime every time a video is streamed. People can pay a dime to see something they want to see. And every band has superfans who will pay a little bit for content, even slapdash low priority content. Taylor Swift probably has thousands of fans who would watch her video feed for hours a day at a penny a minute.
The music industry really has been extremely bad at the internet since the beginning. At some point, there will be, or could be, a website where everything music related will be wrapped up in one place.
Someone thinks it’s a great idea for there to be one website where a person who wants to hear almost everything can, for free, or, sometimes, can pay a small amount. The people in charge of music seem to be enthusiastic about this thing that pays so very little money. They really need to keep trying on the issue of finding a way to get much more money. Pay a dime to watch the new video. The new video will be out on youtube in a week. It’ll be free there. Make some money. I’d think the acts would embrace this.
RE: “Stateside, the problem remains tame”
I actually think that statement is very shortsighted for one of the most global/social/consumer industries there is. The cash cow artists of the industry are “over there”, “over here” and everywhere in between. They travel & they are on the move – and therefore moving targets.
What security innovations have been deployed- globally & permanently- since Grande’s concert? Or is the tour industry NOT going to protect the artist/venue/fans at live events? ALL 3 of those are $ contributors to the industry. Is the game plan to take out more & more insurance in the background? And the public stance to look benevolent for adding “benefit concerts” after the fact- after people are killed?
Guess I’m missing the industry discussion of adding bomb sniffing dogs, securing venue perimeters to be vehicle free walkways only, not 1 but rather a series of detectors that all patrons & venue staff walk through, etc. If you have them, please provide urls for the discussion of how LNE, AEG, etc are stepping up to the (responsibility) plate, instead of just the stockholder mtgs. Certainly is not an issue of finding funds to create global security options.
Merchandise could be connected to the Ticketing system with all Merchandise per-ordered by the FANS if required at a so called % discount price with the local Amazon or similar delivery method. Just in time production of merchandise as the tickets are sold months in advance of the Live Concert. No need to be milling around for merchandise just inside the venue as an easy target. It would increase future sales of Merchandise as the Last attack will no doubt decrease the incentive of future Concert goers to wait in a mass gathering to buy gear at the Show, they will just want to leave as fast and as safely as they can.
Can’t you just order merch from the act?
concerts already sell merchandise at all the venues here in America, I don’t know about Europe but that makes sense to me. Also most all venues and artists have website for ordering Merch of all sorts so this is a mute point I think.
“Third Man pressing plant in Detroit, a 10,000-square-foot facility with a set of eight brand new machines capable of turning out 5,000 vinyl units in an eight-hour shift.”
Paul is this a typo. This plant would only produce 15k units a day if operating round the clock?
I dont think that’s the only typo…
“That calculation does include mega-winnings from Wall Street IPOs. ”
“That calculation does include mega-winnings from Wall Street IPOs. ”
So how much is real direct music income? And how much of that is paid out to musicians and composers?
Do these figures take into account all the various, under the radar shows in every town everywhere every Friday and Saturday night?
The economics of venues / bars / restaurants are dependent, at times, on music. You have customers coming in and spending money on beer. The show might be free or there might be a cover. The band is bringing people in, the band is playing, the band is getting paid, the customers are buying beers for more than the venue spent for the beer. To what extent is that entire segment of the music industry counted in that pie chart? I don’t see “beer sales at venue where there is a concert” A music venue is part of the music industry, right? they make their profit on beer sales.
I fully believe the Blockchain tech will transform this business and shatter a lot of the verticals of today.