Traditional TV Moving To Digital: Similar To Music Biz Disruption, Or Calmer Notes?

A media critique by Wayne Friedman, Staff Writer Friday, March 25, 2016 U.S. music revenues continue to be steady versus a year ago -- up 1% to $7.0 billion in 2015, all as its underlying ecosystem continues to shift. Should TV expect the same disruptions in years to come?   We speak, of course, of digital media transformation. The Recording Industry Association of America now says 34% of its revenue come from digital downloads, with 34.3% from streaming. Physical sales -- CDs, and vinyl -- are now at 28.8% share. CD sales -- which once comprised $9.4 billion in revenue in 2006 -- are now just at $1.5 billion. One silver lining in the physical arena: Vinyl sales, making somewhat of a comeback, are up 32%, to $416 million,their highest level since 1988. Comparisons to TV may be an apples to oranges situation -- because of the advertising component. But it should be noted, music revenues from on-demand streaming ad-supported services were up 31%, to $385.1 million. Overall the music business is further along than TV when it comes to the shift to digital. Total streaming revenues for music grew 29%, to $2.4 billion, with downloads at $2.3 billion. That means a total of $4.8 billion revenues -- nearly 70% of the music industry’s $7.0 billion  -- come from digital sources. TV’s yearly take from all advertising comes to around $70 billion, with total U.S. revenue from multichannel pay TV subscribers at more than $107 billion. But only a fraction of these businesses revenues comes from digital platforms. TV executives believe its business can transform to more than 50% of its revenues coming from digital platforms -- from subscriber fees or advertising dollars -- in the coming years. They point to growing money from new over-the-top (OTT) platforms, new data-based advanced advertising efforts, higher retransmission revenues for TV networks/stations, and a still-strong desire from consumers to spend on entertainment. This is the music to their ears.