How many music streaming services do we really need? One, maybe two, max. A study by a group called Ovum says we’re in for more consolidation in this space. No kidding.
The shift in consumer spending towards accessing music rather than owning it is an unstoppable trend that has resulted in the one of the biggest shake-ups in recorded music distribution for a century, according to global analyst firm Ovum.
Ovum’s latest report 2016 Trends to Watch: Music* points out that it is important to remember that no music subscription service is anywhere near breaking even, and the need for scale is far more important than the color of the balance sheet ink.
Head of Music Practice and author of the report Simon Dyson says, “The recorded music sector of yesterday is quite simply that, a bygone era that is being swept away by shiny new industry players.” Dyson added “music retailers will never sell as many CDs or downloads as they did last year and so services along the music value chain that want to be part of this rapid evolution in recorded music must simply embrace the change and make access work for their business.”
The trends to watch for music in 2016 include:
- Streaming will drive digital music growth in 2016, but will not offset the fall in sales of CDs and downloads.
- Intense competition in the music streaming sector will result in more service casualties.
- Controversy over who benefits most from music streaming will continue to make headline news and remain a divisive issue.
Read the entire report here.