Monday, March 31, 2014

A Look Into The Music Industry’s Crystal Ball

Crystal ball image
“Crystal Ball, Crystal Ball, tell me things as you think they will be.” The great thing about the music business now is that, unlike previous eras, it’s rapidly shifting and morphing at a faster pace than ever. That makes it difficult for some to keep up, more difficult for others to adapt, and pretty near impossible to predict what will happen ten years from now. That said, there are a number indicators that allow us to look into the near future and take an educated guess at what we may see just a few years down the line. Allow me to gaze into my crystal ball.

Streaming will become the primary way that most people consume their music. We’re only at the beginning of the streaming era of music and there’s a lot of room for growth. World-wide there were only 28 million paid subscribers of streaming services last year according to the latest IFPI digital music report, which is a drop in the bucket compared to the number of music consumers on the planet. More and more people are discovering just how useful the access model is as compared to the ownership model. It doesn’t take long to realize that your digital storage filled with a library of songs can’t compete with having access to 10+ million songs anytime and anywhere.

But there will be fewer outlets that deliver it. Right now streaming is a part of the industry that’s completely upside down financially. None of the major platforms, Spotify, Pandora, Beats Music, Slacker, etc., turn a profit yet, instead playing for the big score down the road when the economy of scale flips their way when enough new users sign up. Unfortunately by that time it will be too late. Apple will have entered the game with their own streaming service that will play on all platforms, and will be able to convert its massive existing customer base into monthly paying customers. Amazon will be in the game too, and Google will intensify it’s already potent efforts (perhaps with a separate new YouTube component). Read more on Forbes.

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