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.<\/p>\n
South African entertainment and media outlook: 2014 \u2013 2018, published by financial services company PwC, found that South Africa\u2019s music market was worth R2.13 billion in 2013, down from the 2009 figure of R2.41 billion.<\/p>\n
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.<\/p>\n
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.<\/p>\n
Revenue from retail of physical sales is expected to total R384 million in 2018, down from R974 million in 2013.<\/p>\n
Continued growth in broadband and smartphone penetration is accelerating the shift to digital music, the report said.<\/p>\n
PwC pointed out that digital music is cheaper, offers instant access and is more portable – all major advantages.<\/p>\n
“While Apple\u2019s 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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
Digital unit sales will rise at a CAGR of 18.5% to 18 million in 2018, PwC said.<\/p>\n
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