Sony Predicts Growth Slowdown For Music Industry

The recorded music industry has been on the up and up for the past few years, seeing double digit growth thanks to the magic of streaming. As with so many good things, however, doomsayers at Sony are predicting this precipitous growth will soon come to an end.

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Guest post by Bobby Owsinski of Music 3.0

The last few years have gone better than expected for the recorded music industry, with double digit growth and lots of smiles to go around. With streaming continuing to grow in acceptance, it’s a party that looks to go on for some time, but that’s not what Sony is predicting.

Despite the growth in streaming, Sony believes that the music industry may be in for a big awakening when all the totals are tallied at the end of the year, in figures released to its investors recently.

The decline is predicted to come as a result of a steep downturn in physical sales and downloads that won’t be offset by increased streaming numbers. In fact, the company thinks that downloads will fall by as much as 35% this year, which is a huge hit to major label bottom lines. Considering that downloads were nearly a billion dollars worth of business last year, it takes a lot of streams to make up for that much revenue.

The company also believes that physical sales will drop by 19% in 2018. That said, even at that rate of decline it will still remain a $2.6 billion part of the business.

To be sure, Sony still believes that the music industry will continue to grow, just at a more modest rate. In fact, the prediction is around 4.5%, which is normally a pretty healthy amount that would be welcomed by most industry execs. After the last few furious years though, anything less than double digit growth feels like a decline.

Sony is just being realistic with its shareholders though. Everyone knows that the download is the dinosaur of the business and headed for extinction. CDs will have a longer life, but are still in their twilight as well. The question is, just how much of a decline should we expect?

There is good news in the Sony presentation however. The company expects China to become a top 5 major market for Western music in the next 5 years, which may eventually offset the download and physical declines.