As we in the Caribbean participate in the grand pastime of legal music streaming with the rest of the world on the popular Spotify platform, the economic impact on regional rights holders, artistes and publishers has to be balanced against the real world barriers here of low credit card penetration, varied financial priorities preceding music and entertainment, and entrenched “bad habits” towards legal music consumption. This analysis paints a clearer picture of the Caribbean’s impact on the bottom line of Spotify’s business model. How important is the Caribbean to the music industry beyond influence? Let’s see.
Buoyed by lockdown, streaming enjoyed another strong year in 2020, up 17.1% on 2019according to MIDiA’s recorded music market shares report. But the revenue slowdown will come in 2021, driven by the maturation of the big music markets (e.g. US, UK, Australia) and the growth of emerging markets. Identifying emerging markets growth as a slowdown factor might sound oxymoronic but the lower ARPU in these markets means that subscriber growth and revenue growth are becoming uncoupled. Look no further than Spotify’s earnings: subscribers were up 25% in 2020 but premium revenue was up just 17%, driven by a premium ARPU decline of -9%. Despite the dampening effect of emerging markets, they will be crucial to future growth – yet much of their potential may go untapped. The reason is all to do with how the music industry measures the opportunity, and that approach needs to change.
View original post 797 more words