In times of need, no potential cost saving is too small. And with inflation running high in the UK, Britons are cutting back on some leisure-related spending. In fact, many of them are considering cancelling their subscription to a music streaming service in the coming months.
The music streaming market has been booming for years. So much so that it now represents the main global vector for music listening.
According to the latest annual report of the International Federation of the Phonographic Industry (IFPI), US$16.9bil (RM74.39bil) of the US$25.9bil (RM114.01bil) in revenue generated by music in 2021 came from streaming. Between 2020 and 2021, revenue from this mode of music consumption thus increased by 24.3%.
But it would seem that this growth is slowing down somewhat due to the general rise in prices. This is particularly visible in the UK, where inflation is expected to reach 11% in the fall. This is bad news for Boris Johnson’s (already maligned) government, but especially for the British people.
Many are being forced to cut back on their spending, especially on entertainment. More than a million subscriptions to music streaming services were cancelled in the last quarter of 2022, according to Kantar. Two-thirds of Brits made this decision in an effort to save money. This figure is up 4% compared to the same period last year.
Young people in the UK are the most likely to give up their Spotify, Amazon Music and other such subscriptions to cope with inflation.
“The percentage of under 35s having access to a music subscription (has) dropped from 57.0% to 53.5% year on year,” explains Kantar in its latest report. And this phenomenon is not unique to the UK, since some five million Americans under 35 no longer pay to listen to music online.
For a few months now, analysts have feared that music streaming will experience the same fate as its video counterpart. In April, Netflix reported a drop of 200,000 subscribers due partly to the war in Ukraine, but mostly due to structural factors such as account sharing and competition from new entrants in the market.
“In times of financial uncertainty, services need to be indispensable in subscribers’ minds,” Dominic Sunnebo, the global insight director at Kantar Worldpanel, told The Guardian.
And music streaming platforms seem to be more so than SVoD providers. Analysts at Goldman Sachs estimate that 1.26 billion people will pay to listen to music streaming by 2030. And that’s despite inflation and widespread price increases.
In other words, music streaming still seems to have a bright future ahead. – AFP Relaxnews