Tech

Report: The global music industry will hit rock bottom by 2019

by Mark Teo

By now, we’re used to hearing doom and gloom about the music industry. When listening habits shifted from CDs to digital files, the industry lost its shit over piracy. When listening habits started to shift towards streaming, things got even uglier—in recent months, we’ve seen pathetic royalty cheques and a backlash against Canada’s Tariff 8 (or, as we call it, the Kraft Dinner tariff). And despite the fact that vinyl sales are rising—though nominally—Canadians, by and large, still prefer the digital format. Namely, streaming.

But here’s the thing: Unless you’ve figured out how to scam Spotify, streaming doesn’t pay. And, according to Midia Research, we won’t find a solution anytime soon—they predict that the industry will bottom out by 2019.

Here’s what to expect: The media consulting firm says that revenues will continue to fall by 3 per cent this year, and, they say, will continue to plummet by one per cent annually through 2018. By 2019, the top ten music markets will shrink by 11 per cent. Ouch.

They break those numbers down even more: People purchasing music—whether it’s via CD, vinyl, or digital—will continue to decline as streaming music becomes more ubiquitous. Sales revenue will drop an astounding 44 per cent, while streaming music revenue (will they ever make that profitable?) will grown almost 240 per cent, accounting for a large bulk of digital revenue.

What that means? The whole landscape will continue shifting away from owning music—we’ll be streaming it instead. The chart below details how consumers are expected to consume their music in the coming years.

So, what will this brave new world look like in 2019? Streaming will largely be replacing CDs and digital downloads, but not outright. Midia predicts that curated streaming services—think: Songza—may be on the rise, too. It makes sense: While streaming services offer ever-expansive libraries, we need someone to cut through the clutter.

The good news? The industry will bottom out, but it won’t implode. While traditional forms of consumption will decline, it’s expected that ad-driven streaming and new services will fill the void of CDs and the digital download. Hopeful? Not quite. But it’s something.