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Global Music & Video – Industry Analysis
On-going financial difficulties being experienced in many nations around the world, and the rise in illegal downloads have contributed to the continuing poor performance of the global music and video market.
The global music & video market shrank by -0.5% in 2011, to reach a value of $56.6bn, representing a compound annual rate of change (CARC) of -2.5% for the period spanning 2009-2013.
Decline was primarily driven by the largest markets: the US and Europe, which both posted the biggest declines. The US, representing $27bn of global revenues in 2013, witnessed a CARC of -2.6% between 2009 and 2013, while the European market, worth $18bn in 2013, had a CARC of -2.7% in the same period.
Growth in most countries in the Asia-Pacific region was good: South Korea witnessed a 6% CAGR between 2009 and 2013, while China grew by 3.4% in the same period, and India grew by 6.4%. However, the region witnessed an overall decline due to the Japanese market, the largest in this region, representing 57.4% of the Asia-Pacific value. The Japanese market witnessed a strong drop in revenues in 2013, dropping by -9.9% to $5.5bn.
Growth in the music & video market has primarily been driven by digital market and, in particular, ad-supported streaming services and subscription services.
In the US, according to the Recording Industry Association of America, the retail value of physical formats of music was down by -12.3% between 2012 and 2013, while digital revenues were up by 7.6% overall. This was mostly driven by subscription and on-demand streaming services, which were up by 57.1% and 28.7%. Global subscription service providers include Spotify and Deezer. Ad-supported streaming services include YouTube and Vevo. Despite the phenomenal growth these services have witnessed in recent years, downloads still make up the majority of digital revenues (67%, according to the International Federation of the Phonographic Industry’s Digital Music Report 2014).
The video market is witnessing a similar surge in digital formats, with the US’s Digital Entertainment Group’s Year-End 2013 Home Entertainment Report reporting a 17% growth in digital content in the US, although the physical format of Blu-Rays were still growing at a fairly strong rate. Subscription streaming growth outpaced overall digital growth, expanding by 32% over 2012.
For related content, check out our Music & Video Industry Profiles