Traditional vs digital music in SA
Retail spending on digital music will still account for less than half (47%) of total retail spending on recorded music in South Africa by 2018, new research shows.
South African entertainment and media outlook: 2014 – 2018, published by financial services company PwC, found that South Africa’s music market was worth R2.13 billion in 2013, down from the 2009 figure of R2.41 billion.
Annual revenue is forecast to grow marginally by a compound annual growth rate (CAGR) of 0.5% to remain relatively flat at R2.18 billion in 2018.
The report said that digital music distribution continues to evolve rapidly, and spending on the different music formats and services is set to increase in the next five years.
Revenue from retail of physical sales is expected to total R384 million in 2018, down from R974 million in 2013.
Continued growth in broadband and smartphone penetration is accelerating the shift to digital music, the report said.
PwC pointed out that digital music is cheaper, offers instant access and is more portable – all major advantages.
“While Apple’s iTunes store spearheaded the digital transition, in future the growing availability and popularity of streaming services based on access to a library of content, rather than individual transactions, will be a more important driver of digital growth,” PwC said.
Retail spending on digital music will increase at an estimated CAGR of 17.3% in the next five years and will total R345 million in 2018, it said.
But digital gains will not make up for the physical decline and total recorded music revenue is forecast to decrease at a CAGR of -8.4% over the next five years to R729 million in 2018.
The number of physical unit sales will decrease at a CAGR of -8.8% in the next five years, with unit sales in 2018 forecast at 9 million, less than half of the total of 20 million in 2009.
Digital unit sales will rise at a CAGR of 18.5% to 18 million in 2018, PwC said.
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