When’s the last time you purchased music to own? And I’m not referring only to physical mediums. With the incredible growth of streaming, it’s also increasingly likely that you haven’t bought downloads recently, as a growing percentage of music fans choose to access songs instead of wanting to own them.
In a recent interview, Kevin Twitchell — advisor to the Media & Entertainment practice at DataArt — discussed the monumental changes that have occurred over the past few years in the music business while opening up a dialogue about the next wave of transformation set to unravel in the industry. As physical mediums shifted to downloads, followed by the explosive growth of streaming, we witnessed an immense shift from the ownership model to the one of access. This evolution was primarily a result of the increase in mobile consumption combined with 3G and 4G network speeds, and it has produced many rewards, including a significant revenue boost coupled with an expanding ability for artists to release a vast range of content on a global scale.
But what’s next? Well, those 3G and 4G networks are expected to be massively outdone by the commercial implementation of 5G as soon as next year. With promises of being approximately 64 times faster than 4G, 5G is set to be a game-changer, leading to a wealth of possibilities for innovations and opportunities in the music industry.
Will the availability of 5G internet speeds transform the music business yet again? With technology at the forefront of the rapidly advancing world of music, is the industry ready for another disruptor? And can the current music infrastructures keep up with the revolution?
The Music Market is Alive and Well
As sales of physical mediums rapidly declined, the fear in the music industry was palpable. Falling revenues placed increased pressure on artists to tour relentlessly in order to survive, while record companies and other related businesses were faced with the possibility of never being able to return to the glory days of large volume sales figures with hefty profit margins.
However, the rise of streaming brought a much-needed boost to the entire industry, replacing fear with the potential for massive growth in a relatively short time. The latest report from IFPI (International Federation of the Phonographic Industry) illustrates the continuing revenue gains in the music business, with global recorded music revenues posting growth of 9.7% in 2018. This marks the fourth consecutive year of rising revenues, not to mention one of the highest rates of increase since 1997 when the organization started tracking the market.
There’s no question that streaming is responsible for these incredible gains, with total streaming revenue growing by a staggering 34% in 2018, and the overall digital world accounting for 58.9% of the global market. At the same time, while streaming increasingly dominates recorded music revenue, touring continues to be the primary income source for most artists. In the recent Global Entertainment and Media Outlook 2018–2022 report, PwC predicts that live music revenues will increase at a compound annual growth rate (CAGR) of 3.3% from 2018–2022 to reach an incredible $30.55bn by the end of that four year period, thereby securing the earning power of touring for the majority of global artists.
Are Downloads Coming Back?
As I suggested at the beginning of this article, the likelihood that music fans will download a song is quickly declining. Streaming is faster and cheaper, resulting in a rapid takeover of consumer preference over the last few years.
But wait! With 5G coming to the market, will the massive increase in speed result in a return to downloading music and thereby a shift away from streaming? By using 5G instead of 4G, projections show that the average consumer will save more than 3 hours when downloading a library of 10,000 songs, while saving a total of approximately 23 hours per month across the entirety of their online entertainment engagements, such as music, TV, movies, and games. We’ve already witnessed the majority of telcos investing in content partnerships, such as Verizon Wireless announcing that it will provide Apple Music to some of its paid subscribers at no additional cost, thereby saving each of these consumers $120 per year on a standalone subscription.
So, which way are we headed? Will music fans use the capabilities of 5G to download songs or will streaming remain the preferred choice? I went to my Twitter followers to see what the music community thinks, and although 64% said that they would stream more music once they have access to the increased speed of 5G, 36% stated their intention to download more music as a result of a faster connection, showing a great potential for the first growth in downloading for several years.
Beyond Downloads, Beyond Streaming
Once 5G becomes commercially viable, the massive improvements in speed and quality will open up wonderful opportunities for innovation and the expansion of data-heavy offerings that simply aren’t possible when working with slower connections.
Virtual concerts hold the potential for major growth due to the emergence of 5G speeds. At the same time, this concept is already reaching fantastic heights. Earlier this year, Epic Games’ Fortnite event featured an in-game performance by world-renowned EDM DJ Marshmello, which was watched by approximately 10 million concurrent users. Although the concert was only 10 minutes long, its incredible reach illustrates the expansive future potential for virtual live shows.
For musicians, 5G will take the possibilities for remote collaboration to an entirely new level. Although a range of tools already exists for remote recording, the high latency and lack of reliability in current network connections pose many challenges and greatly reduce the potential for success. With ultra-low latency and a massive boost in speed, 5G opens up many new worlds for musicians and producers to work together without being in the same physical space. From rehearsals and songwriting to recording, performing and teaching, we’re on the cusp of a remote collaboration explosion, with 5G turning previously unimaginable connections into realistic opportunities.
When we think of augmented reality (AR), merchandise isn’t likely to be the first thing that comes to mind. However, using AR to sell merchandise is here, and the potential is incredible. For example, the American Express Music app released a mobile AR experience called Outside In. Fans experience navigation by Justin Timberlake himself while hearing the artist’s stories behind the songs from his new album. While listening to the song “Breeze Off the Pond”, users can explore the lush Montana scenery while interacting with various icons. Throughout the AR experience, fans gain the privilege of being able to purchase exclusive Timberlake merchandise, such as t-shirts and flannels. The mixed reality experience gives the artist a chance to provide a glimpse into their creative world while presenting fans with the opportunity to learn more about their favorite artist and collect some future collector’s items through purchasing exclusive merchandise.
While 5G carries the potential to radically improve and expand upon the world of music and entertainment, many challenges exist. Keeping up with the tracking of new formats and developing copyright regulations for the evolving music industry landscape requires diligence and technological excellence. Musicians will need increasingly granular contracts and deals to effectively control and otherwise impact the ways in which their music is used and distributed. Additionally, the current music infrastructures will require adjustment and expansion to keep up with the rapid advancements arising from the commercial availability of markedly faster network speeds. Although 5G isn’t yet available, it’s coming very soon, and the entire music industry must rise to the occasion to comprehensively prepare for its arrival.