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Global streaming revenue to grow by 40% in 2012 - study

Tom Pakinkis
strategy analytics

Global streaming music revenues will grow by 40% in 2012, almost five times the rate of download revenue.

The figure comes from Strategy Analytics’ latest Global Recorded Music Forecast, which says that music downloads will increase by just 8.5% this year, while global digital music sales will pass the £5 billion barrier. 

Streaming services will therefore take over as the leading revenue growth engine for the music industry in 2012, the study suggests, generating an extra £199 million - £5 million more than downloads at £194 million. 

Digital music spend overall (including mobile) will increase by 17.8% (£836 million) in 2012 to £5.5 billion compared to a 12.1% decline (£1.2 billion) in packaged sales (see Chart 2).

While digital music will increase its share of the global recorded music spent to 39% in 2012, it is still much smaller than physical music sales, which still claim 61% of spending.

Strategy Analytics forecasts that digital spending will overtake physical on a global basis in 2015, although some countries such as the US, Sweden and South Korea, are making the transition to digital taking the lions’ share of spending at a much faster rate. 

Chart 2

In the UK 2012 streaming revenues will grow at over four times (41.9%) the rate of downloads (9.1%), meaning that online streaming and downloads will account for a much higher share of music spend in the UK than globally (38% compared to 22%).

Strategy Analytics also suggests that UK physical sales are decreasing at well over double the global rate, with spend expected to decline by 30% in 2012.

Annual digital spending in the UK is forecast to overtake physical music sales in the UK in 2015 – on par with the rest of the world.

“Although downloads still account for nearly 80% of online music revenues, this market is maturing and spending is flattening in all key territories,” said Strategy Analytics’ director of Digital Media Ed Barton.

“Streaming music services such as Spotify and Deezer will be the key growth drivers over the next five years as usage and spending grow rapidly. ??

“Why? Because people are increasingly valuing accessibility and availability over actual ownership of digital music which, in turn, drives growth in streaming services which routinely offer instant access to over 10m tracks,” he added. 

“Additionally, the emergence of cloud storage of a subscriber’s existing music library for seamless streaming to a range of connectable devices improves the value proposition further.”

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Tags: streaming, itunes, spotify, Digital, CD

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