Streaming services may become a considerable source of revenue in the next five years, as predicted by financial services company Credit Suisse. Credit Suisse expects revenue from paid streaming services to increase nearly six times by 2020. Apple is expected to control around 45% of distribution in paid music streaming. The note also anticipates that 2016 will be the first year since 1998 that the global music industry recovers from its steady decrease in revenue, and sees an overall increase.
Via: Credit Suisse
The report notes how Scandinavian countries like Sweden and Norway have been leaders in the shift to music streaming, and they are reliable models for other country markets around the world. “Sweden and Norway offer a vision of the future of the music industry — these markets have high levels of broadband penetration; fast mobile data networks; and high smartphone penetration,” the note observes. “All are conditions which exist in many other developed markets and we regard it as probably conservative to assume that penetration of paid streaming services in these countries will reach 25% by 2020. This is particularly the case given the entry of Apple into the market — its installed base of loyal customers with a high propensity to transact put Apple Music in a good position to drive penetration higher over time, in our view.”
Digital downloads from retailers like iTunes are not expected to make a resurgence in the next few decades, but hopefully artists can anticipate more substantial revenue from streaming if the report’s predictions are accurate. Financial forecasts of the music industry are not often optimistic, but things may finally be looking up for the music industry.
H/T: Business Insider
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