Streaming will see UK music industry revenue hit £2.7bn within four years -PwC

With Scotland’s biggest music festival set to kick off in under four weeks, a new PwC report reveals the growing popularity of music streaming and its impact on the UK music industry.

According to PwC’s latest Global Entertainment & Media Outlook 2015-2019, technology will continue play a major role in driving future revenue growth: a massive growth in digital music streaming alone is expected to help boost revenues to £2.69bn in 2019, a compound annual growth rate of 0.7 per cent.

This uplift follows a drop in total music revenues in 2014.

Last year, digital music streaming revenue was £124m, up 65 per cent on 2013 and the segment is almost six times the size it was in 2010 in value terms. Streaming accounted for 22 per cent of UK digital recorded music revenue in 2014, but this will increase to 49 per cent by 2019.

Live music revenue is also expected to rise over the next five years, with income from ticket sales forecast to grow faster than sponsorship revenues.

Technology also has a role to play with fans embracing initiatives such as smart wristbands and other new wearables that offer them easy access to events and other incentives.

Colin Slater, digital partner, PwC in Scotland, said: “The entertainment and media industry is at the forefront of the digital revolution, but its future success relies on continually building and enhancing the overall user experience in tune with advances in technology.

“With new subscription-based streaming services coming to market, UK music streaming is set for another strong year in 2015. It’s the music you want, when you want it and it’s more intuitive to your music taste, and we’re sure to see a surge during Scotland’s summer music festival season.

“The growth is being driven by the internet and the consumers love of mobile technology – consumers want a social experience as well as a personal one.

“However in contrast, digital music downloading looks to have peaked. Last year digital music downloading started to decline and we forecast that this will continue to happen in 2015 and beyond.

“In a world that’s in beta, today’s entertainment and media companies need to do three things to succeed: Innovate around the product and the user experience, develop seamless consumer relationships across distribution channels and put mobile - and increasingly video - at the centre of their consumer offerings

Digital music downloading revenues fell from £516m in 2013 to £433m in 2014 and is forecast to decline further to £388m in 2019, when digital music downloading revenue will account for 51 per cent of total digital recorded music revenue, compared with 76 per cent in 2014.

Total digital music revenues, which includes both streaming and downloading, are forecast to overtake radio advertising revenues in 2015.