UK music streaming could double by 2023 by adding new services and innovations targeting different music fans more specifically according to research commissioned by the Entertainment Retailers Association (ERA). The report prepared by consultants OC&C, highlights of which are published in a recent ERA blog, suggest that the already booming streaming market could double to £1.6 Bn annually in as little as four years.
Key to the growth forecast, say OC&C experts, is increasing streaming penetration by creating a range of new services targeting differing customers. Without any new innovations OC&C forecasts that the UK music streaming market would grow from £829m in 2018 to £1-£1.1 Bn in 2023, a compound annual growth rate of 5%-7%. However, by targeting committed music fans with super-premium and add-on services and by finding ways to tempt current non-subscribers the market could grow in a range of £1.25-£1.6 Bn, a compound annual growth rate of 12%-18%.
Pedro Sanches, OC&C partner said, “Our study indicates the UK music industry has a significant opportunity to increase the size of the market beyond even the most bullish expectations. It is clear that if the industry can come up with tailored offers which deliver value to specific groups of consumers then there’s a major prize at stake.”
Kim Bayley, ERA CEO said, “We commissioned this report to get an independent sense-check on the growth prospects for streaming. It’s fair to say even we were surprised just how positive the results are. This is a significant piece of work showing how music can embrace the learnings of related leisure markets.”
£500m bonus from new services
Central to the OC&C study is a detailed analysis of the progress of streaming in different demographics (it accounts for 69% of listening time for 16-19 year olds but only 16% of listening time for 45-54 year olds) and what could be done to persuade each group either to trade up from current services or begin to subscribe for the first time.
The report details how businesses in other sectors ranging from mobile phone operators to gyms and video subscription services like Netflix have driven growth by creating a range of services for customer groups with different needs who may also value features differently.
While all-you-can-eat music streaming services have huge success and remain the default option for most, some consumers may be more easily reached with other features, it says. OC&C calculates that more innovation in services could result in a potential £500m boost to the market. These range from creating new premium tiers and new entry points to paid streaming to offering the ability to access streaming services without taking out a subscription.
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