|Juniper: Streaming Will Drive Digital Music Sales Through 2019…But Sloooooowly
Juniper Research has released a new report that indicates the digital music industry will experience slow revenue growth over the next five years, expanding from $12.3 billion in 2014 to $13.9 billion in 2019. As reported by Fierce Mobile IT, the research suggests a strong performance in the robust streaming music sector largely will be offset by a decrease in revenues from legacy services, including ringtones, ring-back tones, and music sales.
According to the new report titled “Digital Music: Streaming, Download, and Legacy Services 2014-2019,” the market will be characterized by consumer migration to cloud-based services. Such pure play music providers as Spotify and Pandora increasingly will find themselves competing with personalized services from the leading over-the-top (OTT) players, including Apple and Google. Additionally, piracy will remain a significant factor responsible for “major revenue leakage,” particularly in emerging markets (think China), where only a small percentage of content is legally acquired.
The report strongly suggests music consumption is set to become a highly sociable activity, with features such as music discovery and social media integration that connects music fans. However, finding ways to expand the pool of music subscribers while increasing the ease of discovery remains a key challenge for streaming companies. In a statement, Juniper said smartphones and tablets will be the primary platforms of growth, although digital music revenues on the PC/laptop will remain robust over the forecast period. Additionally, emerging markets are expected to strengthen in terms of digital music consumption, as disposable income levels continue to rise and streaming services expand into these regions.
|McDonald’s To Customers: Do You Want Some Digital Music With That?
Two all-beef patties, special sauce, lettuce, cheese pickles, onions, on a sesame seed bun…with a side of digital music. McDonald’s apparently has launched an “online music experience” designed to expand its digital presence, modernize the brand, and drive customers through a new online food-ordering app. Specifically, the fast-food chain has hired Ticketmaster’s Julia Vander Ploeg to create a “variety of digital music and entertainment experiences that McDonald’s will provide to customers, to reward the most enthusiastic customers and drive frequency.”
According to several sources, Vander Ploeg joins the company as a chief member of its Global Digital Team, which is focused on customer engagement, eCommerce, service delivery, and digital content. While no specifics are available, the McDonald’s website has posted a listing for a product director for music and entertainment, whose role would include crafting the strategy and product roadmap “for a variety of digital music and entertainment experiences that McDonald’s will provide to customers.” This person also will “establish multi-channel music and emerging entertainment programs to reward our most enthusiastic customers and drive frequency.”
“As digital consumer engagement models and retail business opportunities evolve, McDonald’s will continue to create an eCommerce platform that will enable us to reach even more customers and support McDonald’s global digital business and technology growth,” the company’s website says. “Our eCommerce platform will revolutionize how McDonald’s interfaces with our customers by removing physical boundaries to allow our customers to connect to,, and order McDonald’s any time or place, globally.”
|Vinyl Album Sales Grow To Still-MinusculeNumber Because Of “Enhanced Quality”
Every few months some analyst looking at the recorded music industry notices that vinyl album sales keep ticking upwards, which triggers yet another look at analog music sales within the greater digital universe. The most recent of these reviews is offered by TheStreet.com’s Jason Notte, who this week noted that “vinyl record sales have jumped a whopping 40.4% since the first six months of last year.” Noting that vinyl accounts for only a small percentage of total album sales (which in the first quarter of this year were down nearly 15% from the same period last year), he explained that sales of the old LP format rose from 2.9 million records in the first six months of 2013 to 4 million in the first half of this year.
“That’s a fairly small number when you consider that, even without Nielsen Soundscan’s ‘Track Equivalent Album’ and ‘Streaming Equivalent’ album measures that turn individual tracks into album sales, there were 121 million albums sold in the U.S. in the first half of 2014,” Notte writes. “Even the ‘dead’ CD still managed 63 million sales during that time.”
Still, it’s interesting to note – and Notte does – that vinyl sales are up 250% over the past 20 years while overall music sales slid 50%. As music fans have continued to embrace streaming music, “vinyl has become streaming’s aesthetic counterweight,” he says. “It’s a $20 to $30 luxury purchase made not only for its enhanced quality, but for its historic value. It’s a purchase reserved for standout releases and made by only the most dedicated listeners willing to invest in the music and the equipment to play it.”
|The Guardian: Hi-Res Digital Music Is Better, But Can Lead To Disappointment
“Why are we still listening to over-compressed music through low-quality headphones when advances in bandwidth, storage capacity, and speakers means we could be listening to high-quality uncompressed audio all the time?” This is the very valid question The Guardian recently asked its U.K. readers, noting that in an era of 24-bit audio, virtually all music sold and streamed today is available only in a much lower quality 16-bit CD or even the more highly compressed MP3 format. All conventional industry wisdom, theories, and testing aside, the question remains: can listeners actually tell the difference between high- and low-resolution?
This is the question three audiophiles at The Guardian asked themselves. After listening to a number of tracks played in 128kbps and 320kbps MP3; CD; and 24-bit studio master, the answer was…yes, although not necessarily in a transformative way. “The difference between MP3 and CD was most striking, [but] I struggled to differentiate much from CD to studio master,” said Tim Jonze, The Guardian‘s music editor. “Ultimately the difference is there but it’s subtle and it depends on how you listen to music.” Jason Phipps, The Guardian‘s head of audio, noted “there’s a distinct quality difference between the kind of compressed, middling MP3 commonly downloaded from the major platforms and the 24-bit high-res studio master.”
And Guardian correspondent Samuel Gibbs added, “Overall the studio masters sounded fuller…but that difference wasn’t always a good thing. It was disappointing to hear a recording of Pavarotti’s ‘Nessun Dorma’ sound worse in studio master, as it exposed the fact that the orchestra and the tenor’s tracks were recorded separately in different environments. Still, what was very apparent is just how bad a poor-quality MP3 sounded, how good a 320kbps MP3 and CD sounded, and how cutting out the middle man in the audio production chain with a studio master could have unexpected results.”
|Gracenote Hires New CEO To Expand RoleOf Metadata In The “Digital Ecosystem”
Most online music fans have never heard of Gracenote, but the provider of audio and video metadata and recognition services – owned by Tribune Media Co. – has hired former M-Go chief John Batter, to serve as its new CEO. This is a somewhat big deal because Batter’s new role is to expand the company’s services “internationally and aggressively” and “expand the role metadata plays in the digital ecosystem and experience.”
Consumers encounter Gracenote services via such services as Google Play, Xbox Music, and MTV, usually without even knowing it. As explained by Billboard, the company’s MusicID service uses metadata to let listeners identify songs whether downloaded or ripped from CDs, and its “scan and match” technology helps cloud services (e.g. Amazon Cloud Player) sync offline and online music collections. Such technologies facilitate discovery and ease of use, two vital aspects of today’s digital music services.
“Tribune Media has decided to focus its digital investment strategy on growing its metadata business globally, which today includes Gracenote and What’s-On,” said Tribune CEO Peter Liguori in a statement. “It is becoming very clear that metadata will help drive the evolution of next-generation TV and music experiences and we believe Gracenote is in an excellent position to drive the industry forward.”
A publication of Bunzel Media Resources © 2014