The music business is a dynamic field, perpetually being reshaped by new technologies, evolving consumer behaviors, and emerging platforms. This post will delve into some of the key trends and predictions that are expected to shape the future of the music industry in 2023 and beyond.
The global music industry is on a trajectory of growth, forecasted to expand by 8% in 2023. This builds on a solid 24% growth achieved in 2022, demonstrating the industry's resilience and adaptability in the face of global challenges【8†source】.
Driving this growth is a combination of factors. Firstly, the continued dominance of music streaming, which is expected to grow by 12% this year, driven by increased volume, price, and the rise of emerging platforms. Financial analysts Goldman Sachs have indicated confidence in the resilience of music streaming in any economic downturn, suggesting a sustainable growth trend for the sector. The global value of the music streaming market is projected to reach a staggering $89.3 billion in 2030, a significant leap from $33 billion in 2021【8†source】.
Social media platforms have become instrumental in music discovery, with a significant number of listeners using these platforms to find new music. Platforms such as YouTube, Meta/Facebook, Instagram, and TikTok lead the way in music discovery, each with their unique strengths【9†source】.
However, TikTok's growth might face two significant challenges. The first challenge revolves around security concerns, following admissions from its China-based CEO that China-based employees can access information from overseas users. While assurances have been made that data isn't shared with the Chinese government, these concerns could potentially slow TikTok's growth【10†source】.
The second challenge is the payment model for TikTok's upcoming streaming service. With nearly one in two Australians preferring not to pay for streaming music, it remains to be seen whether TikTok can convince its user base to pay for its new service【10†source】.
In a world that increasingly appreciates diversity and authenticity, music in local dialects from Asia, South America, Africa, and the Middle East is garnering global interest. This trend is corroborated by the fact that in 2021, over 60% of YouTube's top songs were in a non-English language【11†source】.
Artists who perform in these languages could capitalize on this trend to achieve global recognition. For instance, First Nations talents in Australia have already proven their worth in the domestic market and are now eyeing global markets in 2023【11†source】.
The traditional model of ad revenue distribution is undergoing changes, with platforms like YouTube Shorts now sharing ad revenue between music rights holders and creators. This is a significant shift in the industry, potentially leading to increased earnings for artists and creators, and it could pressure other platforms like TikTok to follow suit【12†source】.
However, this shift coincides with a decrease in online advertising revenue, as demonstrated by YouTube's ad revenue falling 1.9% YoY to $7.07 billion in the third quarter of 2022. It remains to be seen how these dynamics will play out in the long run【12†source】.
Safety and health considerations are influencing how music festivals are conducted. Following highly publicised incidents in the past,quote("The Impact of Health and Safety", "giving permission for increased crowd capacity.")quote("There’ll be crack-downs on festivals", "with just a single access road.")
councils and residents are becoming more cautious about granting permissions for increased crowd capacity. In addition, festivals held in areas with limited access or potential natural hazards, such as flood plains, are likely to face stricter regulations1.
The dominance of major ticketing platforms like Ticketmaster and Ticketek is being challenged by new entrants. For instance, AEG Presents' ASX, a US-based promoter, is expected to open an office in Australia, bringing additional competition to the market. Simultaneously, Sydney-based promoter TEG, having acquired the startup FAN+, is planning to integrate it into Ticketek to offer personalized experiences like backstage tours, attending sound checks, and launch parties1.
Subscription prices for music streaming services are predicted to rise, driven by the fact that previous increases did not result in significant consumer backlash. Additionally, streaming services are introducing new features to justify the price increases and enrich the user experience. For example, Spotify's upcoming Platinum Plan, priced at about $20 per month, will offer VIP premiums with limited content and early access to concert tickets, along with exclusive podcasts and other features1.
Simultaneously, there is a move towards more tiered pricing, with niche music genres like jazz and classical potentially priced differently due to their longer track lengths. This could cater to a more diverse range of listeners and increase overall revenue.
Despite being a seemingly outdated medium, cassettes are experiencing a revival, particularly among super fans and indie stores. They currently make up a small portion of total album sales, but their share is likely to grow as more artists release their music on cassette, capitalizing on their appeal as collectibles and their low production and distribution costs1.
In conclusion, the future of the music business is exciting and promising, shaped by trends like global industry growth, changing music discovery methods, increased diversity in music, shifts in revenue sharing, enhanced safety measures at festivals, new players in ticketing, rising subscription prices, and the revival of nostalgic formats like cassettes. As these trends continue to unfold, they will create new opportunities and challenges for everyone involved in the industry, from artists and producers to consumers and businesses.