My predictions for the music industry in 2017

February 19, 2017 09:00 AM

When it comes to market forecasts and predictions, Modern Trader is all about conviction and accountability. But in the music industry, “conviction” typically refers to criminal prosecution, and “accountability” is to Lord Kanye. Nevertheless, I am more than willing to revisit my best music industry predictions from last year’s issue.

My predictions for the music industry in 2017

  • Vinyl album sales hit eight million units for the first time since Garth Brooks’ debut album.
  • The Fugees play a reunion show at a festival while Wyclef Jean tours behind a new solo album.
  • Maggie Rogers becomes a star and is nominated for Best New Artist Grammy.
  • Multiple hitmakers release songs – not albums – to fuel their success. There are no physical copies released on any format, yet radio, streaming, and downloading all embrace the power of a great song. Labels start reaching for their ankles.
  • Festivals ramp up brand sponsorship like college football bowls. The Tumblr Coachella Festival?
  • Facebook’s video search platform gives rise to at least three new breakout music acts that go viral within six weeks.
  • RFID (Radio-Frequency Identification) badges seen at festivals become common-place at large concert venues.
  • Artists ramp-up self-promotion through social media, selling tickets direct to fans through start-up, third-party sites. Ticketmaster continues to eat babies.
  • Spotify will file an IPO in 2017. The terms on their $1 billion raise in March 2016 incent them to do so. Look for a good bounce at IPO.
  • Music stocks to buy in 2017 In general, we will see more consolidation and the big get bigger, extracting many of the fees mentioned above. Live Nation (LYV), Sirius XM (SIRI), Amazon (AMZN), cv (TWX) and Spotify once they go public due to the IPO hype, their addition of podcasts, videos, and partnerships with major content providers like ESPN, NBC, and Comedy Central. 
  • Music stocks to hold Generally large labels with huge back catalogs have already been punished for the decline in physical and downloaded sales. These stocks will languish for the next three to five years before declining precipitously. If the music bounces, and the stock follows, sell Vivendi (VIVHY) and Sony (SNE).
  • Music stocks to sell Streaming sites with a large user base of free users will not be able to make up revenues with ads since so many competing services offer something better. Apple continues to live off baby boomers and exclusive artist deals, but Millennials don’t buy mp3s, the platform is a terrible user experience and shows no signs of improvement and no one buys iPods; short Pandora (P) and Apple (AAPL).
  • @jvEvanston on Twitter & jbvannatta on Spotify gets a rush of followers for “Top 23 of 2016” songs of the year playlist.
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