The future record business could be huge. Despite the potential, revenue growth is going to be modest in the next five years, says music industry veteran Tom Silverman, founder of Tommy Boy Records and executive director of New Music Seminar. He does not warn that downloads and CDs will fall off the proverbial cliff. He does not expect an explosion of streaming revenues. Instead, he sees a steady transition to new business models over the next five years.
Two years ago, Silverman talked about “the $100 billion music business” that’s waiting for labels and digital service providers. It would require “an organized effort” to realize the potential revenue awaiting in an estimated 2 billion smartphones and a growing fleet of connected automobiles.
That $100-billion number was as much a challenge as a prediction. Silverman had expected both digital and physical sales to fall and access-based services to take a greater role. He was optimistic that consumers had started to pay for on-demand services like Spotify and Muve Music. He looked at SiriusXM’s 23 million subscribers — that number has since grown to over 27 million — and saw evidence that consumers would pay to access music.