Music Market
The music industry is at a crossroads. The crux of the music market today, from a consumer perspective, lies in streaming apps. According to the Global Web Index, today 67% of all adults make use of a music streaming service. With 48.3% of the global music subscriber market, Spotify is far ahead of its nearest competitor, Apple Music, which has only 13.7%. An additional 13.4% of users listen to music on Tencent Music, 13.3% listen to music on Amazon Music, and 8.9% listen to music on YouTube Music (MIDIA, 2023).
Music sales hit a new high of 26.2B in 2022, up 9.1% from a previous high in 2021 – and this was mainly due to the streaming industry, which saw paying subscribers rise 17.8% from 523 million in 2021 to 616 million in 2022. Sixty-seven percent of revenue currently comes from streaming. The music streaming industry is estimated to generate $27.14B in revenue in 2023 and increase at a compound annual growth rate (CAGR 2022-2026) of 15.67% by 2027. There are various estimates that suggest the total number of users would reach 1.2 billion by the year 2027 (Statista, 2022).
Streaming apps have definitely made listening to music more convenient, offering a vast library at our fingertips. But here's the catch: they aren't exactly a hotbed for artistic creativity. Mainly focused on profits, these platforms often end up restricting the listening experience rather than enhancing it. Remember the days when record labels were the middlemen? They controlled the money and the music, often at the expense of artists and fans.
This role, unfortunately, led to widespread misuse of power. Fast forward to today, and streaming services have stepped into those middleman shoes. But, just like before, this hasn't helped in promoting artistic creativity or diversity. The harsh truth? Most artists barely make $23 per month from streaming. And for fans who want to support their favorite artists directly? At the moment, there are simply no options.
Options for decentralization
And while the current wave of Web3 technology talks a big game about decentralization and giving power back to users, it's not quite hitting home yet, especially in terms of ease of use for musicians and their audiences. And with the advent of AI upon us, the big question that has to be answered is; Who will hold the reins?
Overall, the current music industry does a mediocre-at-best job for both musicians and fans, with a broken business model, inadequate tech tools, and a lack of fairness and accessibility. This is the situation into which AI music tools are currently entering and it can only go one of two ways: Most likely Scenario Under the control of record labels and streaming services, AI-based music could lead to an increasingly centralized and exploitative industry. This scenario spells bad news for musicians and fans, with a stark decline in the diversity and richness of music. Picture music production driven solely by profit motives, reminiscent of how online ads are tailored to consumer habits. In this world, the unique qualities of human artists are undervalued, overshadowed by AI creations that are cheaper and easier for corporations to manage.
Alternative Scenario
On the flip side, what if AI music tools were in the hands of artists and fans, used in a way that fosters flexibility and diversity? This could usher in a new era of unparalleled musical diversity, where AI aids artists in bringing their visions to life. We could see a democratic and decentralized economic model, where AI models trained on artists’ works contribute back to their creators. This scenario paints a future of music that's fair, diverse, and true to the artistic spirit.
The time we decide whether we want a world of music that is manufactured and monolithic or one that is vibrant and varied, is already here. It is clear that blockchain technology is the key to unlocking the alternative scenario for music, one free from the grip of exploitative intermediaries. Simplifying the process for fans to directly reward artists, or to support AI innovations that in turn fairly compensate the creative minds behind them. The promise of an amazing new music industry is not just on the horizon – it's here, waiting for us to act. This is our chance to redefine the industry, to create a system that values artists and enhances the fan experience.
We've touched on AI's potential in the music market, specifically its role in music production. Let's zoom in on the numbers: the global music production and distribution market stands at $38.7 billion, with an impressive 4.4% CAGR. This is a significant playing field, and it's one where AI-driven music tools are set to make a major impact. The music tools market, a subset of this larger industry, accounts for $4.1 billion. Recent trends indicate that AI tools will increasingly dominate this space. Our goal with Jam Galaxy is to harness this trend, making sure that the power of AI in music stays where it belongs – with the musicians themselves.
Turning to our platform's strength in supporting artists' direct distribution, this market, currently valued at $1.7 billion, grew by 16.6% in 2022 alone. With 2023's data on the horizon, we anticipate this growth trend will not only continue but accelerate. Jam Galaxy is at the forefront of tapping into this expanding market, aligning with the increasing desire for artists to have direct control over their music distribution.
Goldman Sachs forecasts a future where superfan monetization reaches a staggering $4.2 billion. This segues perfectly into who Jam Galaxy is really for. As we shift to our Targeted Audience section, we'll delve into how our platform caters to this dedicated and lucrative market segment.
Geographical focus
United States The US, a leader in the global music scene, is where Jam Galaxy sets its sights. Together with Canada, it represents the largest region for recorded music, showing a robust 5.0% growth in 2022.
Japan and South Korea In the heart of Asia, Japan and South Korea represent significant markets with a flair for blending music and technology. As these regions gear up for an impressive growth to US$19.24 billion by 2027, Jam Galaxy is ready to play its part in these technologically savvy markets, riding the wave of a 10.29% projected growth.
Europe Europe’s music scene is as diverse as its cultural heritage. Witnessing a 9.0% growth in the global recorded music market in 2022, Europe presents a promising landscape for Jam Galaxy.
As we turn our focus to the United States, Japan and South Korea, and Europe, we're mindful of the broader challenges that the music industry faces. Jam Galaxy's role in these markets is not just about business growth; it's about contributing to a healthier, more sustainable music ecosystem. Our goal is to provide solutions that are genuinely helpful and progressive, in an industry that's ripe for change.
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