Amidst the ever-shifting landscape of consumer behavior and economic fluctuations, the music industry braces for an 8% growth in 2023. Goldman Sachs, the esteemed financial analysts, remain optimistic following a remarkable 24% surge in 2022. This surge was propelled by increased revenue streams from streaming, emerging platforms, and even the resurgence of physical formats like CDs, vinyl, and cassettes.
Goldman Sachs places unwavering faith in the resilience of music streaming, projecting a 12% growth rate this year, a trajectory expected to persist for the next seven years. This ascent will be fueled by volume, pricing dynamics, and the emergence of new platforms.
The global value of the music streaming market is anticipated to scale towering heights, surging from $33 billion in 2021 to a staggering $89.3 billion in 2030.
TikTok’s Ascendancy in Music Discovery
In the realm of music discovery, a fascinating shift unfolds in Australia. According to the Victorian Music Development Office’s Music Habits study from December 2022, discovering new music is a pivotal pursuit for 46% of Australians, with that figure surging to an impressive 70% among those under the age of 35.
YouTube currently leads the pack in music discovery, claiming a 31% share, closely trailed by commercial radio at 20%, music streaming services at 18%, social media at 17%, and TV and movie streaming at 16%.
Meta/Facebook currently enjoys supremacy in the social media arena, with 61% of all age groups relying on it for music discovery. Instagram follows closely at 55%, TikTok holds strong at 50%, and Twitter carves its niche at 18%. It’s unlikely that TikTok will surpass Meta in 2023, with an estimated 3.95 million Australian users projected by 2026.
TikTok’s Growing Pains
As TikTok continues its meteoric growth in Australia, two significant hurdles lie ahead. First, concerns have surfaced regarding data security, especially after the admission by the China-based CEO that employees in China can access information from overseas users. However, assurances of stringent cybersecurity controls have been given.
Secondly, with Gen Z firmly under TikTok’s spell, the launch of its streaming service raises questions about whether users will be willing to pay for it. VMDO notes that nearly half of Aussies prefer not to pay for streaming music, potentially posing a challenge for TikTok’s ambitions.
Tatiana Cirisano, a music industry analyst at MIDiA Research, believes TikTok’s cultural influence is a significant force, with potential implications for other streaming platforms.
Read More : Highlights of Market Art Fair 2023
First Nation Language Tracks on the Global Stage
In 2023, First Nations talents, having solidified their presence in the domestic market, set their sights on the global stage. Artists like Baker Boy and Budjerah, who’ve showcased their skills in New York, Los Angeles, and the UK’s The Great Escape, are expected to make further international strides.
Singing in indigenous languages provides an advantage, as there is growing global interest in local dialects from regions such as Asia, South America, Africa, and the Middle East. This aligns with the trend of over 60% of YouTube’s top songs being in non-English languages in 2021, with India ranking as the second-largest user base (9.5%) after the United States (16%).
With superstars like BTS, Blackpink, and Bad Bunny making waves and bypassing traditional radio, the music landscape is poised for transformative shifts in 2023.
Enhanced Revenue Sharing with Artists
YouTube Shorts will commence sharing ad revenue between music rights holders and creators from February 1. This move mirrors Meta’s initiative to allocate 20% of earnings to artists from the use of their songs in user-generated video content on Facebook, with the remaining 80% divided between rights holders and Meta.
The music industry watches with keen interest, wondering whether TikTok will follow suit in response to calls from artists.
Against this backdrop, industry leaders remain vigilant about the trajectory of online advertising following a slide in 2022. YouTube’s ad revenue dipped by 1.9% year-over-year to $7.07 billion during July to September 2022, defying market expectations.
Read More : 5 Cutting-Edge Music Industry Trends of 2023
Pill Testing at Victoria’s Festivals?
The Australian Capital Territory’s foray into pill-testing at festivals may inspire Victoria to follow suit. Empowered by the Greens, a Bill is being reintroduced to establish a two-year drug testing trial. This initiative includes setting up a mobile pill testing facility for festivals and a fixed-site lab for more comprehensive analysis, with the potential for a four-year extension following a review.
Increased Ticketing Options in Australia
Ticketmaster and Ticketek, the giants of the Australian ticketing industry, face a formidable challenge as US-based promoter AEG Presents prepares to open an office in Australia. In the meantime, Sydney-based promoter TEG has acquired sports and entertainment experience startup FAN+ and will integrate it into Ticketek. This strategic move promises unique experiences such as backstage tours, attendance at sound checks, invitations to launch parties, and even the opportunity to flip the coin at sporting events.
The Era of Super-Festivals Nearing Its End
Following high-profile incidents in the previous year, expect local councils and residents to adopt a more stringent stance on permitting increased crowd capacities at festivals. Crackdowns will likely target festivals located in flood-prone areas and those with only a single access road.
Music Streaming Subscription Costs on the Rise
Music streaming services are poised to incrementally raise subscription prices, driven by consumer willingness to invest in personalized and interactive music experiences. Spatial Audio, in particular, garners high demand, with over 80% of Apple Music subscribers embracing it in 2022. Spotify’s upcoming Platinum Plan, priced at approximately $20 per month, signifies this upward trend.
Additionally, expect a proliferation of tiered subscription models, with niche music genres such as jazz and classical, featuring longer tracks, commanding different pricing structures.
The Cassette Revival
As the cassette revival gains momentum, more artists are likely to release their music on this vintage format in 2023. Although it constitutes a modest 0.44% of total US album sales, Australian indie stores report cassette sales accounting for 5% of their turnover.
Cassettes appeal to super fans and offer a cost-effective format with digital download codes often included. In the US, sales of cassette albums witnessed a 28% surge to 440,000 units in 2022, with soundtracks like ‘Guardians of the Galaxy, Vol. 2’ leading the charge.
The revival of cassettes presents an intriguing trend to watch in 2023, especially as more artists embrace this nostalgic format.