For the second consecutive year, the global recorded music industry body IFPI reported rising trade revenues, growing 5.9% to reach $15.6 billion in 2016

Our forecasts supplement IFPI’s trade revenue data with richer national-level consumer expenditure data from local bodies in core markets, and project CAGR of 2.3% to 2021, tapering off as streaming approaches maturity

This fairly modest topline growth for global recorded music streaming trade revenues is the product of our judgement that the marketplace remains awash with free music. Streaming trade revenue growth could be higher still if the industry finds a solution to piracy through technological or regulatory means, obviating the need for the ad-funded compromise

The “fair return” to US music publishers and songwriters for rights used by interactive streaming services will be decided in 2017 by the Copyright Royalty Board (CRB)

Rights owners want to switch to a fixed per-stream or per-user rate on all tiers, arguing music has an inherent value. Apple is asking for a much lower per-stream rate

Amazon, Google, Spotify and Pandora warn of disruption to free and ad-supported tiers if the revenue-share tariff is not rolled over, and the CRB could side with them

Our latest forecasts point to the continued strength of DTT within the UK broadcast market. We predict DTT-only homes will account for 42% of TV viewing ten years from now, up from 38% today.

Much of this is due to the UK’s ageing population profile, since DTT skews older. The number of over-45s in DTTonly homes is set to increase by 13% by 2026.

The other key factor is the continued growth of flexible pay-lite services—for example, Netflix and NOW TV— which are of greater appeal to younger audiences.

As Spotify wavers around the breakeven point, the deal with UMG is good news for royalty costs and thus for the likely advent of the IPO rumoured for autumn 2017

Royalty costs will reduce if Spotify reaches the subscriber growth targets that have been agreed – these have not been disclosed, so are hard to track

Question marks persist over whether a two-week optional windowing of new releases on the premium tier will significantly drive upgrades from the free tier

2016 was yet another year in which we saw big changes in the UK’s video consumption habits amongst the under45s, with little let up in the decline of traditional broadcast linear TV viewing for the younger age groups.

Online video-on-demand services will continue to grow, partly at the expense of traditional TV audiences. We also expect the overall volume of viewing to rise, mainly due to wider production of and access to short-form content.

Despite these changes, conventional broadcasters look to be strong for years to come—we estimate they will still account for 80% of all video viewing in 2026.

Streaming is now mainstream and we predict 113% growth in expenditure on subscriptions for 2015-18 in the top four markets (US, UK, Germany and France)

Free vs paid-for streaming is the central question for the music ecosystem: free yields fractions of pennies, making subscription the only credible business model

Market leader Spotify is facing competition from tech giants Amazon, Apple and Google, with deep pockets, for whom content is a pawn in a larger game