Here’s music for the music business’s ears: U.S. consumers’ spending on audio entertainment is expected to rise significantly this year off of record spending in 2018. On-demand music services are expected to bring in 22 percent more revenue in 2019, rising to $7.7 billion, according to the Consumer Technology Association’s semi-annual U.S. consumer technology sales and forecasts report released this week.
America’s consumer tech industry overall is expected to reach a record $398 billion in retail revenue, up around 4 percent from 2018, according to the report — a growth largely driven by a propulsive recent increase in smart speakers like the Amazon Echo and Google Home alongside smart home devices and wireless earbuds. All of that redirects positively into the bottom lines of services like Pandora, Apple Music and Spotify.
“Thanks to the number of devices that have digital assistance now, pretty much any device out there now is a streaming device,” Richard Kowalski, CTA’s senior manager of industry and business intelligence, tells Rolling Stone. “If it’s a smart speaker or smart TV, it can stream music. That definitely drives growth in music streaming. As a whole, these new devices have revived audio and made it something accessible. It started with radio manufacturers — now, devices have gained ‘smartness’ and high quality.” Retail companies are betting on a feedback loop whereby the more people sign onto streaming, the more people will be interested in devices, too.
The CTA also finds that consumer spending on video streaming services like Netflix and Hulu is expected to rise 27 percent to $18 billion. The growth in video streaming may seem unrelated to the growth in music services, but the two go hand-in-hand when it comes to luring in new users — especially as the film and music industries see more collaboration and symmetry. (Case in point: The top-selling album of 2018 was a movie soundtrack.)
The companies offering these disparate services themselves understand the link between them. “Audio and video streaming services are realizing they’re very closely affiliated in terms of how they deliver content and what they’re offering,” Kowalski says. “I think we might see more of that, as providers realize their services are part of a bigger picture and there’s more benefit in offering a little discount to join two services together.” Consumer spending on music and video streaming services in total is expected to rise to $26 billion, a figure 25 percent higher than in 2018.
According to a separate report from DEG: The Digital Entertainment Group, U.S. consumer spending on home entertainment in 2018 — comprising video-on-demand, music streaming and box-office film performance — hit a record high of $23.3 billion, with subscription streaming leading the way, particularly in the fourth-quarter holiday period.