Australian music streaming market still growing

Market consolidation and strategic price hikes drive a more profitable phase for major global streaming operators.

David Kennedy · Venture Insights14 June 2024Period: FY243 min read

10.6%↑

Subscription revenue CAGR (FY23-FY28)

94%↑

Subscription share of total industry revenue (FY28)

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Abstract

This report analyses the maturation of the Australian music streaming market, forecasting a shift from subscriber acquisition to revenue expansion via price increases. While the market was highly fragmented before 2016, it is now dominated by four global players: Spotify, Apple Music, Amazon Music, and YouTube Music. Subscription revenue is projected to grow at a 10.6% CAGR from FY23 to FY28, eventually accounting for 94% of total industry revenues as operators leverage high subscriber loyalty to improve profitability.

Key Takeaways

The Australian music streaming market is maturing, with revenue growth now primarily driven by price increases rather than new subscriber acquisition.
Subscription revenue is forecast to grow at a 10.6% CAGR through FY28, while advertising revenue will grow at a slower 6.9% rate.
Industry ARPU is expected to jump 9.5% annually through FY25 to reach $14.09, driven by recent price hikes from all major operators.

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Frequently Asked Questions

The market is maturing, but revenue growth remains strong with a projected 10.6% CAGR for subscriptions through FY28. Growth is shifting from new user acquisition to price optimization, with industry ARPU expected to reach $14.09 by FY25.

Spotify is consolidating its lead and is forecast to capture 68% of revenue share by FY28, up from 57% in FY23. YouTube Music is the primary laggard, with its revenue share predicted to contract from 17% to 13% over the same period.

Music streaming services enjoy higher retention rates than SVOD platforms, allowing for aggressive pricing strategies. Operators are leveraging this loyalty to drive a 9.5% annual jump in ARPU through FY25.

Advertising is becoming a secondary revenue stream, growing at a modest 6.9% compared to double-digit subscription growth. By FY28, subscription fees will dominate the sector, accounting for 94% of total industry revenue.

Australian music streaming market still growing

Abstract

Key Takeaways

Frequently Asked Questions

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