The recent IFPI Global Music Report 2017 yielded the second straight year of promising news regarding the music industry's general recovery and offered a universal sigh of relief as revenues, led by paid streaming subscription, registered a substantial increase in value.
Despite such continuing concerns as the value gap and copyright infringement due to "stream ripping" - the act of ‘ripping’ or creating a downloadable file from music that is available to stream online, typically an MP3 from a streamed music video - the report also contained some positive news concerning future frontiers that can be exploited and monetized by the record industry.
First, competition has intensified:
While Spotify still leads the world in streaming, Apple Music and Google are also players, as is China's Tencent Music Entertainment which owns the country's dominant streaming services QQ Music, Kugou and Kuwo. Lately, Amazon has also gotten into the game with Amazon Music Unlimited, and Pandora has launched an on-demand service.
In IFPI's report, Will Page, Spotify's director of economics, states: “The key development in the market at the moment is competition. What is especially key is that it is competition based on market growth, not market stealing. There are more big players - and arguably more sustainable players - than have come and gone in the past, and it’s all about making new audiences aware of streaming and expanding the market. At the moment, we are growing, Apple’s growing, Amazon’s growing, and other services are coming on board, and we’re not stealing each other’s lunch.”
Streaming services are now providing more varied services, and emerging territories such as China, India, Russia, Brazil, Mexico and Africa are expanding global penetration. Innovations such as flexible pricing and technologies such as voice control activation are expected to fuel growth and to increase the appeal of home acceptance and the in-car integration of streaming.
“Amazon is pioneering voice control in the music space," concedes Ole Obermann, Warner Music's Chief Digital Officer & EVP Business Development, noted in the IFPI Report.
"It feels that if we want to get digital music into people’s living rooms or cars, then voice activated control will be the innovation that accelerates that usage.”
Other emerging fields in streaming include the licensed lip-synch app musical.ly, which now boasts 120M users around the world, and technologies such as social messaging, augmented reality and virtual reality (predicted by Digi-Capital to hit US $150B in revenues by 2020.)
“With something like messaging, you don’t have to include music, but it’s about expressing yourself and music really lends itself to that," says Warner's Obermann. "It’s a great way of making those services more fun, engaging and personalized. Music is very attractive for those types of services."
The final cog that is opening up the digital future is data.
Dennis Kooker, President, Global Digital Business & US Sales Sony Music Entertainment, notes: “The increased information we're getting is a positive development and providing deep business intelligence. Not only is every stakeholder - from the label to the publisher, to the service, to the artist, to the songwriter - able to gain from that intelligence, to continue to grow the business, but also there is the transparency element. We are able to provide meaningful, timely, global information to our artists and partners.”