The "Global Music" report published by Credit Suisse aims to analyze a market, that of music, in continuous and evident change, in the wake of new technologies and the power relations between them. The report offers a bullish view of the sector, driven by the shift in consumption towards paid streaming platforms such as Spotify, Deezer and Beats Music and the decline in digital downloads, while physical purchases limit the damage.
Perhaps more surprising than any other data contained in the report is that of digital downloads, which risk falling by 11% in 2014 and 10% in 2015. A sharply accelerating decline even compared to the latest estimates, which a decline of 4% and 3% respectively.
On the other hand, the estimates on ad-funded streaming improve a lot, that of radio services such as Pandora/Sirius XM, but also, simply, of the music listened to on YouTube. The previous forecast was for a decline of 6% in 2014 and 1% in 2015, a forecast, however, reversed in the new report, which speaks of a growth of 31% this year and 21% next for this genre of services. Again with respect to estimates, the decline in "physical" purchases slows down to -11%/-14% against the previous -13%/-15%).
But taking the lion's share of the new music industry scene are paid streaming services, such as Spotify and Deezer, which are expected to grow revenues between 50% and 60% between 2014 and 2016. The possible relaunch of another similar service also fits into the discussion: Beasts Music, which recently passed into the hands of Apple.
As regards the global revenues of the sector for 2014-2016, there is still talk of a decline of 4% for the current year, of a settlement at -1% in 2015 (which according to Credit Suisse will be a turning point for the sector), to prepare for 2016 growth, +3%.
What is striking, as mentioned, is the impetuous growth of paid streaming services which, according to estimates, in 2016 will constitute 34% of total music industry revenues and 55% of digital ones, growing from the current shares respectively of the 14% and 31%.
Such a growth that a question arises spontaneously: is streaming cannibalizing downloads? Looking at the data recorded by a company like Spotify, even compared to a giant like iTunes (de facto present on all Apple devices), one would say yes.
