Digital music in South Africa

New research finds that digital music sales will account for just 14% of South African recorded music retail sales by 2017.

This is according to the Fourth South African edition of PwC’s South African entertainment and media outlook: 2013 – 2017, published on Thursday (19 September).

Interestingly, local artists dominated digital sales in 2012, while international artists accounted for the majority of physical music sales

According to PwC, South Africa’s music market was worth R2.2 billion in 2012, down from the 2008 revenue of R2.6 billion.

Annual revenue, however, is forecast to grow marginally by a compound annual growth rate (CAGR) of 0.4% remaining relatively flat at R2.2 billion in 2017.

PwC notes that retail spending on physical formats has been falling for the last few years and will continue to fall in the years up to and including  2017.

Revenues from the retail value of physical sales are expected to total R811 million in 2017, less than half the equivalent revenues in 2008.

Digital, the financial services firm says, is a very attractive option as consumers can buy individual songs, listen to music on portable devices, access music instantly and pay less for it.

In contrast, retail spending on digital music will increase at an estimated CAGR of 7.8% in the next five years and will total approximately R132 million in 2017.

“However, the gains made by digital retailers will fall short of compensating for the physical declines,” the report said. Although annual growth is forecast for retail spending on digital music, by 2017, digital will account for just 14.0% of total retail spending on
recorded music.

“Moreover, the annual rise in share will be modest. In 2012, digital took a 7.3% share of total spending,” it said.

Spending on live music will increase at a forecast CAGR of 6.3% in the next five years and will total R1.3 billion in 2017. It will account for 57% of total spending in the music market.

Global market

Globally, the music industry is getting back on track, notes PwC with total consumer spending on music at US$49.9 billion in 2012, a slight decline from 2011.

However, annual revenue will start to grow again in 2013 and will reach US$53.8 billion in 2017 – a CAGR of 1.5% over the forecast period.

Digital music revenues will exceed physical revenues globally by 2016, demonstrating the importance of  digital formats to the industry. Widespread access to broadband and smartphones will encourage further  growth in music subscription services, although there is  no uniformity in the way digital markets will evolve.

More news on digital music

Look & Listen to re-launch digital music store

Mxit launches music platform

Google takes on Spotify with new music service

Music sales go mutli-national

BlackBerry Music now in SA

Must Read

Partner Content

Show comments

Trending Now

Follow Us

Digital music in South Africa