Sony Music CEO predicts streaming will stop the bleeding and save the music industry

Midem paid for part of Chris O’Brien’s travel to Cannes for the Midem Music Industry Festival where he is participating as a startup competition judge. Our coverage remains objective.

After watching music industry revenues plummet from $30 billion annually to $15 billion over the past decade, Sony Music CEO Doug Morris knows as well as anyone just how painful the era of digital disruption has been.

But Morris believes everything is about to change.

In an interview on stage at the Midem Music Industry Festival today in Cannes, Morris said the shift from digital downloads to music streaming is about to get a gigantic push from the imminent launch of Apple’s new service. And rather than being a source of fear, Morris was firm in his belief that music streaming was going to be the industry’s salvation.

“I think this is the tipping point that will bring it back to where it was before,” Morris said. “It’s the beginning of an amazing moment for our industry. And I believe most of the consumption of music now will be done through streaming.”

Morris acknowledged that the music industry has had a contentious relationship with streaming services such as Spotify up until now. In particular, Morris said he still doesn’t like ad-supported streaming. He noted that with Spotify, 100 streams by a paid user equals a dollar in royalties, while it takes 900 ad-supported streams to generate the same dollar.

“So you can tell which one we like,” he said.

But after he confirmed Apple’s intention to announce its music streaming service tomorrow, he said the company’s entrance will lead to mass adoption for streaming around the globe over the next decade. And he is confident that over time, that will lead to consumers spending more money on music and that the industry can get close to that $30 billion figure again.

As evidence for his argument, he points to Sweden, which he called the “first mature streaming country.”

“Sweden is back to where it was 10 years ago (in terms of music revenue),” Morris said. “My guess is that slowly Europe and the U.S. will go that way. And we will have an industry that is robust and powerful.”

He also took a moment to praise the role Spotify and its chief executive Daniel Ek have played in developing the market for streaming.

“Daniel Ek has done an incredible job with Spotify,” Morris said. “Pushing that ball up the hill, getting it to where he has is just incredible.”