New research finds that digital music sales will account for just 14% of South African recorded music retail sales by 2017.<\/p>\n
This is according to the\u00a0Fourth South African edition of PwC\u2019s South African entertainment and media outlook: 2013 \u2013 2017, published on Thursday (19 September).<\/p>\n
Interestingly, local artists dominated digital sales\u00a0in 2012, while international artists\u00a0accounted for the majority of physical music sales<\/p>\n
According to PwC, South Africa\u2019s music market was worth R2.2 billion in 2012, down from the 2008 revenue of R2.6 billion.<\/p>\n
Annual revenue, however, is forecast to grow marginally by a compound annual growth rate (CAGR) of 0.4% remaining relatively \ufb02at at R2.2 billion in 2017.<\/p>\n
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 \u00a02017.<\/p>\n
Revenues from the retail value of physical sales are expected to total R811 million in 2017, less than half the equivalent revenues in 2008.<\/p>\n
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.<\/p>\n
In contrast, retail spending on digital\u00a0music will increase at an estimated\u00a0CAGR of 7.8% in the next five\u00a0years and will total approximately\u00a0R132 million in 2017.<\/p>\n
“However, the\u00a0gains made by digital retailers will fall\u00a0short of compensating for the physical\u00a0declines,” the report said.\u00a0Although annual growth is forecast\u00a0for retail spending on digital music,\u00a0by 2017, digital will account for just\u00a014.0% of total retail spending on
\nrecorded music.<\/p>\n
“Moreover, the annual\u00a0rise in share will be modest. In 2012,\u00a0digital took a 7.3% share of total\u00a0spending,” it said.<\/p>\n
Spending on live music will increase\u00a0at a forecast CAGR of 6.3% in the next\u00a0\ufb01ve years and will total R1.3 billion\u00a0in 2017. It will account for 57% of\u00a0total spending in the music market.<\/p>\n
Global market<\/strong><\/p>\n Globally, the music industry is getting back on track, notes PwC with total consumer spending on music at US$49.9 billion\u00a0in 2012, a slight decline from 2011.<\/p>\n However, annual\u00a0revenue will start to grow again in 2013 and will reach US$53.8 billion in 2017 – a CAGR of 1.5% over the\u00a0forecast period.<\/p>\n Digital music revenues will exceed physical revenues globally by 2016, demonstrating the importance of \u00a0digital formats to the industry. Widespread access to broadband and smartphones will encourage further \u00a0growth in music subscription services, although there is \u00a0no uniformity in the way digital markets will evolve.<\/p>\n Look & Listen to re-launch digital music store<\/a><\/strong><\/p>\n Mxit launches music platform<\/strong><\/a><\/p>\n Google takes on Spotify with new music service<\/a><\/strong><\/p>\nMore news on digital music<\/h3>\n