Surge In Demand For Networked Audio Drives Music Sales
A surge in demand for networked audio products, has had a knock-on effect with the Australian Recording Industry Association reporting its biggest year of growth in more than two decades.
At last week’s Hong Kong Trade Fair for consumer electronic products, several manufacturers revealed a new generation of networked audio products including coffee tables with networked speakers and wireless charging built in as well as new 24Bit audio devices.
Also, on offer was a new range of ruggedised sound systems aimed at tradies.
ARIA CEO Dan Rosen believes the smart home will provide the next lift in demand, following a 10.5 per cent increase in 2017, to $391 million, up from $353 million in 2016.
The double-digital growth is the largest since 1996 and means Australian music has recorded three straight years of growth in sales after 15 consecutive years of decline.
Rosen told The Australian Financial Review “It’s great to be in the tailwinds rather than the headwinds.”
At last week’s show several manufacturers revealed product that came close to impeding on the copyright of brands such as Bang & Olufsen who are looking to grow sales in the mass networked audio and headphone markets.
Nearly half of ARIA sales came from streaming services, both ad-funded and subscription, with a combined $189 million. The majority of this was made up of subscription revenue at $169.6 million. Subscription revenue surged 54.8 per cent over 2017, while ad-funded jumped 64.4 per cent.
Vinyl albums sales jumped 19.5 per cent to $18.1 million.
Mr Rosen said with the expected proliferation of smart home devices such as Google Home, Amazon Alexa and Apple HomePod, the music industry had another chance to boost its revenue.
“We’ve been looking at overseas markets where this is more developed, music is the most popular use of smart speakers. It’s a huge growth opportunity for the business,” he said.
“In five years, the industry has been completely transformed and we’ve embraced this business model which is returning us to growth. It’s an exciting time, and it feels like it’s sustainable growth, but we’re hopeful the next wave of growth will come from smart speakers.”