IBISWorld Market Research
Online downloads are becoming the preferred method of purchasing media.
Melbourne, Australia (PRWEB) May 15, 2014
Online downloads are becoming the preferred method of purchasing media, which has negatively affected the Reproduction of Recorded Media industry in Australia. New media solutions have allowed users to access music and video more easily than ever before. Aside from the structural change in media formats, online media piracy has become increasingly problematic. Consumer attitudes towards music piracy and higher bandwidth speeds have resulted in increased illegal downloads. Similarly, imports and exports have contracted, as the need for industry goods has declined and consumers have purchased products from new sources. As a result, industry revenue is forecast to decline by an annualised 6.2% in the five years through 2013-14, to reach $475.9 million. Revenue is forecast to decline by 7.1% in 2013-14, due to increased external competition from online subscription platforms and pervasive piracy issues.
Subdued profit margins and declining industry revenue have resulted in enterprise numbers diminishing. Digital sales have grown rapidly over the past five years at the expense of physical sales, constraining industry revenue. In 2013, the Australian Recording Industry Association's (ARIA's) Wholesale Figures report revealed that digital sales exceeded physical sales for the first time. New formats and the rise of cloud computing are allowing consumers to access and use media in new ways. CD and DVD sales have dropped over the past five years, but this has been partly offset by growth in sales of Blu-ray products. Vinyl record sales have risen, buoyed by their artistic and cultural appeal, but still comprise a small portion of total industry revenue.
Over the next five years, Australian operators in the Reproduction of Recorded Media industry will face extensive competition in new-format markets, due to overseas companies being able to penetrate global markets with ease. Piracy is expected to be a lingering issue due to higher bandwidth speeds. As a result of changes in technology and media delivery, international trade will continue to slump. Both imports and exports are forecast to decline as consumers turn away from traditional physical media. The growth in digital media sales over the next five years will constrain industry revenue.
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IBISWorld industry Report Key Topics
Companies in this industry are engaged in the physical reproduction of pre-recorded audio, video, software and other data on electronic, optical and magnetic media. Physical types of media include vinyl records, CD, DVD and Blu-ray products.
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