Key Players in the Digital Goods Sector
Digital Goods: A Rapidly Developing Industry
In our most recent infographic we researched the digital goods sector, an industry exploding in revenue growth year on year. In an era where Netflix subscriptions have overtaken DVD rental, and SaaS companies are on the rise, we looked at some of the key players in the market that are taking the digital world by storm: gaming, e-learning, music & video streaming, SaaS, and e-books. Have a look at the insights below…some of them might surprise you!
Digital Music/Video Streaming
Although the number of music streaming users worldwide is expected to grow from 1.1 billion in 2016 to 1.4 billion in 2022, it’s surprising to note that digital music generated only $7.8 billion worth of revenue worldwide in 2016. In 2017, YouTube was considered the most used platform for music streaming, ahead of Deezer and Spotify – this suggests that there’s a large number of users availing of free streaming services.
In terms of video, as of 2017, 81.2% of U.S. online users had accessed digital video content, and by the fourth quarter of 2017, records show that Netflix had 117 million streaming subscribers worldwide. Revenue in the video streaming sector is expected to grow to $70 billion by 2021, though nowhere near as profitable as some other verticals are forecasted to be.
What came as probably the most surprising fact from this research was the discovery that e-Learning is by far leading the way in the digital goods sector; in 2016 it generated $165 billion worldwide. It’s estimated that by 2022, e-Learning will be worth $275 billion globally. It comes as no surprise then that sites like udemy.com and coursea.org both have an Alexa rank of less than 1,000 which is a good indication of the traffic volumes to their site - more and more it seems, people want to upskill.
Gaming took second place at $116 billion during 2017, which should be expected considering that online gaming has been on the upward trajectory for the last number of years. In 2016, only 26% of all computer and video games sold in the United States were in physical form – approximately 119 million people downloaded games. This year, worldwide consumer online gaming traffic is expected to reach 2,857 petabytes per month…that’s 2,857,000 terabytes!
SaaS is another area of interest and seems to have exploded in growth – in 2016 it generated $77 billion in global revenue and this expected to increase steadily over the next 10 years, reaching approximately $308 billion by 2026. Enterprise process applications is by far the most profitable category within the SaaS vertical, e.g. CRM databases, Content Management systems, Business Process Management applications, and Accounting software. In the 2016 fiscal year alone, CRM company Salesforce generated $6.7 billion – 8% of the total global revenue for SaaS that year.
In 2015, there were 221 million e-books sold in the United States, and as of February 2017, 41% of all books sold in the United States are e-books. By the end of this year, the e-book share of total book sales worldwide is expected to grow to over 25% - double its figure in 2013. However, the story in Britain may not be as bright; a 2017 article by the Guardian reported a 17% dip in the sales of consumer e-books, the lowest since 2011. Sales of printed books have increased due to “screen fatigue” which is considered the cause for a lag in e-book sales; “There is generally a sense that people are now getting screen tiredness, or fatigue, from so many devices being used, watched or looked at in their week. [Printed] books provide an opportunity to step away from that.”