Even as reports grow darker from Wall Street amid fears of a recession, Goldman Sachs predicts a booming decade for the music industry, with total music revenue doubling to about $131 billion by 2030. The company “Music in the Air” Annual Predictions He expects that a combination of global broadcast growth, emerging platforms like TikTok, a revival of the live music market and the continued strength of vinyl sales, will drive the recorded music industry’s revenue to $52.3 billion by 2030, $7.5 billion more than last year’s forecast and more than double IFPI’s revenue in last year, which was just under $26 billion.
It’s bullish about publishing, too, with revenue expected to rise to $11.6 billion in 2030, $1 billion more than last year’s forecast for this year. This height is based on “higher [projected] streaming, physical returns and performance returns”, the latter linked to a faster-than-expected recovery in the live sector after its near-total shutdown due to the pandemic.
The finding can be found in the report’s opening pages: “We expect consumer spending on music to remain resilient in a context of higher inflation/weaker macro environment. Our analysis shows that music remains one of the most unprofitable forms of entertainment, with spending still lower by 2%. 40% from its historical peak, while consumption continues to grow year after year.”
The report, written by analyst Lisa Yang, breaks some of its forecasts for next year due to a “weaker macroeconomic impact” and the impact of the Russian war on Ukraine, which has largely alienated both countries from the global music economy. However, it expects 12% growth in broadcasting, “driven by volume, price and emerging platforms” and that it will be “resilient in light of economic downturn (and more than SVOD)” — the report goes to great lengths to distinguish audio streaming from video, saying that music is more stable and has deeper market penetration.
It also notes competition among streaming companies as positive, with Spotify being the “clear leader” with a 34.4% global market share, although its lead dwindles, China’s YouTube Music and Tencent Music gaining while Apple Music and Amazon Music “remain stable”. Widely. “
And while it lowered its forecast for the total number of paid streaming subscribers by 2030 — from 1.277 billion to 1.26 billion — it raised its forecast for streaming revenue, based on average revenue per user (ARPU), from $42.8 to $45.8.
It’s no surprise to expect the continued dominance of the Big Three – Sony, Universal and Warner – even though independents, notably France’s Belive, continue to rise. Its live music forecast for 2030 has remained stable, with it forecast to generate $38.3 billion this year.
“The global music market (recorded, published and live) rebounded strongly in 2021, up 34% year over year in our estimates, driven by a strong return of live events (+200% annually or back to 50% of 2019 levels), accelerated adoption of live streaming (+ 24% YoY) and physical sales return (+16% YoY),” states the report. “As a result, both recorded music and music publishing grew at the fastest rate since our recordings began, up 18.5%/17% year-over-year, sequentially, and beating our previous expectations of 11%/12% sequentially.”
The report also bolsters recent industry talk about a slowdown in the hot catalog acquisition business, with interest rates rising. He adds, “Catalog investments are likely to remain a major debate until we have greater disclosure and clarity on actual returns, or until actual spending decreases,” although he notes the explosive growth in Cowen and Elton John’s catalogs in the wake of the biography “Bohemian Rhapsody” and “Rocket Man”.
But a large portion of its growth forecast is based on emerging music platforms including TikTok, podcasts, video games and others, which it says accounted for 30% of ad-supported industry revenue last year. Goldman expects that number to rise to 40% in 2030, and rise to 12% of total recorded music revenue from 5% last year.
Music streaming is a “more compelling value proposition” than SVOD due to the increased time spent in it, greater market penetration for streaming music, and the fact that consumers spend a relatively small amount of money on music, leaving room for price increases with relatively little risk of being chewed.
It also identified market implications for several companies, with Universal Music, Live Nation and NetEase listed as Buy; Spotify, Believe, and Sonos as neutral; and Tencent and SiriusXM for sale.
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