By 2020? Keep The Faith, Future is Bright
Physical formats disappearing, downloads crashing, streaming too limited to ever take over, depressing? Obviously not. Clearly, current context doesn’t enable to live again music industry hey-days, but how will be this context by 2020?
As we noticed in previous paragraph, there is two key indicators to forecast upcoming years: the number of paying subscribers and the amount of money they are willing to pay.
The former is limited by smartphone propagation but that one is increasing incredibly well. By 2020, near 6 billion smartphones are expected to be operating. Looking at China example, where foreign acts almost never sold a thing – bestselling foreign albums of all-time there struggled to sell half a million copies – there is already over 800 million internet users including 50 million paying subscribers for various downloads services. While last IFPI report ranked China as the 19th largest market for music, the country will most likely rank at least inside the Top 5 by 2020, by that time the country will have over 700 million unique users of smartphones.
The latter indicator, e.g. the price consumers are willing to pay, is also favorable to streaming. In fact, despite $120 being almost twice the old $64 average of spendings, the service is not the same anymore. Instead of buying a few albums, an average streaming service user will say to more than one thousand different songs per year. No more music player limitation also improves greatly the service, which ends up being naturally worthier. As for the old $64 average, it needs to be separated in two classes: regular buyers and intermittent buyers. First group used to spend a huge $380 per year in music purchases, meaning a spending of $120 for a better service is truly a given for them.