In last week’s 3L-3S, we featured a piece on how the emergence of headphones are actually influencing the sort of music being produced. This piece in the Economist looks at the business side of things for ‘earwear’. The numbers are indeed staggering:
“Apple does not release figures for any of its “wearables”, but AirPods are the fastest-growing of all of its products, with profit margins above 50%, says Dan Ives of Wedbush Securities, an investment firm. With the new noise-cancelling AirPod Pro, which costs around $250 a pair, he reckons Apple’s ear-ware may generate up to $15bn of sales next year. That would be about four times the revenues of a headphone veteran like Bose. Horace Dediu, a technology analyst, predicts that this quarter AirPod sales could exceed those of the iPod at its peak around Christmas 2007.”
Audible content is likewise undergoing a mini-revolution. For the third year in a row, revenues from recorded music in America grew by double digits in 2018, largely thanks to subscriptions to Spotify, Apple Music and the like. Podcasts have grown both more numerous and more compelling. This year Spotify has set out to rule the roost in this medium, which Apple first streamed via iTunes in the mid-2000s. The Swedish firm acquired Gimlet, Anchor and Parcast, three firms that serve different aspects of the podcast market; it now hosts a staggering 500,000 podcasts; hours spent listening to them grew by 39% year-on-year in the third quarter. In October it boasted that the conversion of podcast listeners to paying subscribers is “almost too good to be true”.”
But even these numbers dwarf in front of the video industry prompting the audio industry leaders to suggest there is a long way to go.
“Industry executives contend that audio is undervalued—especially compared with video. As Spotify’s co-founder, Daniel Ek, said earlier this year, time spent on each is about the same, but the video industry is worth $1trn versus $100bn for audio. “Are our eyes really worth ten times more than our ears?” he asks.
The eyeball plainly still dominates. The number of screens dwarfs that of “hearables”. Between them, just three Tinseltown groups—Warner Media, Disney and Netflix—have spent as much as $250bn on visual programming since 2010. Audio, including music, comes nowhere near. That said, the battle to “monetise the ear”, as Greg Maffei, Liberty Media’s boss, puts it, is in full swing. These days no one would lend Mark Antony theirs; they would rent or sell them.”
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