In my last post I had high hopes that massive growth and multiple entries to streaming would give us 10% growth and over 18 billion in revenue. It did not materialize! iTunes and Amazon, the strong holds of music as a merchandise, are finished.
The religion of FREE or almost FREE has taken over this industry.
IFPI announced tragic numbers for 2013! A year ago they reported brilliant numbers, specifically 16.5 billion for 2012 with growth of .3%. Spotify was named the main contributor of this success. The reality: 2012 ended with one percent decline, considering that global inflation was well above 1%.
Last week, IFPI released a long delayed report for 2013, showing a 3.9% decline from the previous year and total global revenues at 15 billion. An elementary school student could see that 16.5 billion to 15 billion equals a 9% reduction. Those numbers are tragic and confirm the end of music as merchandise. Apple’s and Amazon’s entry into music streaming will add more fuel to the fire which will burn the “music house” to the ground.
Ads and subs have a global income limit defined between 20 and 35 billion dollars. Returning music to merchandise can and will bring 100 billion to the table.
Discovery Moment Monetization is our only hope. There is no risk; all practitioners of “total pleasure for free” will be better off when they switch to this simple monetization method.
Religion of free is unsustainable. ”All inclusive” streaming with music discovery tools, or full access with full “ownership” on YouTube’s cloud player, will not save the industry.