Yesterday, we analysed the latest music figures from UK body ERA, highlighting a deceleration in the growth of spending on streaming subscriptions. Midia Research has been pondering the same trend.
“There are no two ways about it, 2023 is going to be a challenging year. The sheer volume of disruptive trends is unprecedented in modern times, and this comes at the exact same time that the Western music streaming market is beginning to slow. A perfect storm,” wrote MD Mark Mulligan. However, he offered some optimism too – at least for the recorded-music world, if not for the live industry.
“Slowdown does not need to mean decline, at least not for subscriptions. Midia’s data shows that consumers are going to cut down on going out and on real live events before cancelling subscriptions, and because they will be going out less, they will need more to keep them occupied at home. So, streaming subscriptions (music, video, and games) may prove to be the affordable luxuries that keep consumers entertained throughout the coming year.”
That does spell concern, given that 2022 ended with a swathe of artists cancelling tours and speaking out about the financial (and knock-on mental health) pressures of the post-lockdowns live circuit. Any further cutdown on live-events spending is bad news indeed for artists below the uppermost tier of stars.
This doesn’t mean streaming services and the recorded music industry can relax, however. Mulligan suggested that if overall consumer spending falls, so will advertising spend from brands.
“With ad revenues representing 27% of all streaming revenues, a significant drop in ad revenue in 2023 (e.g., -8%) could, in a bear-case scenario, be enough to slow overall global streaming revenue growth almost to a halt,” he warned.
“Non-DSP was a major driver of industry growth in 2020 and 2021, but as most of it is ad supported, this segment is far more vulnerable to economic pressures than subscriptions.”
Strap in, folks.
Get A Free Music Ally Account
Access unlimited News articles on the site, PLUS a trial of Music Ally’s subscriber-only services, including our industry-leading daily Bulletin email.
Related posts
The digital marketing guide: expert insight, case studies, fresh approaches, and overlooked opportunities.
