In this week’s edition of Five on Friday, RIAA reports mid-year results, revealing that streaming music is dominating music industry revenue, a new report shows that over-the-top TV revenue will jump 26 percent this year to $28.8 billion, Bloomberg says that Google and Facebook will comprise more than half of the digital ad market in 2018, Adobe will acquire Marketo for $4.75 billion, and China has blocked Amazon-owned Twitch.

Streaming Music Makes Up 75 Percent of Music Revenue

The Recording Industry Association of America (RIAA) released its mid-year results for music revenues for the first half of 2018. The report confirmed what many music industry experts suspected – that streaming subscription services like Spotify, Pandora, Apple Music and Tidal are now the biggest source of revenue in the industry. Streaming music makes up 75 percent of revenue.

Here are other highlights from the report:

• In the first half of 2018, total revenue for recorded music was $4.6 billion, a 10 percent increase over the first half of 2017.
• Revenue from streaming music grew 28 percent to $3.4 billion. It was $2.68 billion during the first half of 2017.
• Paid subscriptions are the biggest format for music by revenue.
• Revenue from CDs dropped 41 percent.

For more highlights from RIAA’s mid-year 2018 report, visit RIAA.com.

U.S. OTT Revenue Estimated to Grow to $28.8 Billion in 2018 

Netflix. Hulu. CBS All Access. Amazon Prime. ESPN+. New OTT subscription services are launching all the time. They’ve become so popular, in fact, that Digital TV Research’s most recent report estimates that OTT services will generate nearly $28.8 billion in subscription and advertising revenue this year alone, a 26 percent increase over 2017. Netflix revenue represents about $15.8 billion of that total.

Global OTT revenue will be about $69 billion this year, a 30 percent increase over last year. By 2023, that revenue will grow to $129 billion globally. In the U.S., OTT revenue will grow to $47.8 billion by 2023, reports Multichannel. Advertising-supported SVOD services will see a global revenue increase to $47 billion by 2023, a 36 percent increase over 2017.

Simon Murray, Principal Analyst at Digital TV Research, said, “No prizes for guessing that the U.S .will remain the dominant territory by some distance. However, its share of global revenues will fall from 43% in 2017 to 37% by 2023. We forecast that revenues in the US will more than double between 2017 and 2023 – adding nearly $25 billion to reach $48 billion.”

In a separate report, Digital TV Research estimated that the number of paying SVOD subscribers worldwide would grow 409 million between 2017 and 2023 to 777 million. China and the U.S. combined would have more than half the world’s SVOD subscribers. Read more highlights about the OTT market here.

Google and Facebook Dominate Online Advertising Arena

Tired of trend reports yet? We hope not. Here’s another one. According to Bloomberg, online advertising will represent half of all ad sales in 2018, and it will be in the neighborhood of $106.6 billion. Total advertising sales, which include print, radio and TV ads, will grow to a record $207 billion this year.

Magna Global said that social media advertising sales would grow by 32.6 percent this year, digital video ad sales would grow by 24.7 percent and search advertising would grow by 15.8 percent. Radio and print advertising will both decline, at 4.7 percent and 17.0 percent, respectively. Google and Facebook are, of course, at the forefront with Google dominating search ad sales and Facebook dominating social media ads. Read more 2018 advertising estimates in “Google, Facebook Lead Digital’s March to Half of U.S. Ad Market” by Lucas Shaw for Bloomberg.

Adobe to acquire Marketo for $4.75 billion

Last week, Adobe (NASDAQ: ADBE) announced it would acquire Marketo for $4.75 billion. Provided the companies receive the appropriate regulatory approvals, the deal is expected to close in the fourth quarter of Adobe’s 2018 fiscal year.

Marketo, a feature-rich cloud platform for B2B marketing, has nearly 5,000 customers and it will allow Adobe to offer a new set of solutions to its own clients through Adobe Experience Cloud. With Marketo’s marketing applications, more than 500 partners and a marketing community with over 65,000 members, Marketo can provide a host of benefits to Adobe clients.

“The imperative for marketers across all industries is a laser focus on providing relevant, personalized and engaging experiences,” said Brad Rencher, executive vice president and general manager, Digital Experience, Adobe, in a news release. “The acquisition of Marketo widens Adobe’s lead in customer experience across B2C and B2B and puts Adobe Experience Cloud at the heart of all marketing.”

“Adobe and Marketo both share an unwavering belief in the power of content and data to drive business results,” said Steve Lucas, CEO of Marketo. “Marketo delivers the leading B2B marketing engagement platform for the modern marketer, and there is no better home for Marketo to continue to rapidly innovate than Adobe.”

Once the deal closes, Lucas will become a part of Adobe’s senior leadership team and he will continue to lead Marketo as part of Adobe’s Digital Experience business.

China Blocks Live-Streaming Video Game Service Twitch

CNN reports that Amazon-owned Twitch, the most popular service for live-streaming video games, has been blocked in China and is not accessible in the App Store in China. According to CNN, Twitch has become the third most popular app in the Chinese App Store and the government is apparently not happy. Twitch fans tuned in to watch eSports during the Asian Games, because they couldn’t get the games on state-run TV.

Some are speculating that it has to do with the government’s recent crackdown on gaming. Mashable reports that, earlier this year, Chinese authorities stopped approving new video games for sale, and online gaming was going to be limited in the name of saving the eyesight of children. China isn’t talking though, so no one knows for sure how, when or why the blockage occurred. We can’t image that Twitch – or Amazon – will take this lightly.