According to a new report from Goldman Sachs, nearly 1.2 billion people will be paying for music streaming in just 11 years.
The latest report from the investment bank – dubbed ‘Music In The Air’ – comes nearly two years after Goldman Sachs predicted global revenue from paid music streaming alone will hit $28 billion in 2030.
Two months ago, the IFPI reported that global recorded music revenues hit $19.1 billion in 2018, up 9.7% over 2017, thanks in large part to music platforms, including Spotify, Apple Music, Deezer, and others. So, Goldman Sachs’ global revenue projection doesn’t seem too far-fetched.
The investment bank writes,
“After nearly two decades of disruption, the music industry is undergoing a massive revival. Artists, labels, and publishers are cashing in on the growing popularity of streaming platforms like Spotify and Apple Music – and consumers are signing up for subscriptions like never before.“
According to the investment bank, live music revenue totaled $26 billion in 2017. Recorded music revenue totaled $30 billion. Publishing revenue hit $6 billion. In total, global music revenue totaled $62 billion.
Updating its projected forecast, Goldman Sachs forecasts overall music revenue to more than double to about $131 billion by 2030.
Breaking that number down, recorded music revenue will reach $80 billion while live music revenue will hit $38 billion. Music publishing will total $12.5 billion.
So, what’s behind the surge? Goldman Sachs writes that millennials and Generation Z music lovers spend more of their annual budgets on music than other age groups. People aged 13-17, for example, now spend $80 a year. Those aged 18-34 spend $163. Overall, people of all ages spend an average of $152 to enjoy their favorite music.
Breaking down the proportion of people who stream music on their smartphones, 18% used music streaming platforms in developed markets last year. That number will more than double to 37% by 2030. In emerging markets, 3% of people streamed music last year on their smartphones. By 2030, that number will reach 10%.
In a stern warning to the music industry, however, Goldman Sachs wrote platforms like Spotify and Apple Music must continue to provide “access to millions of tracks.”
41% of paying users consider this very important. 35% also consider a large catalog fairly important. The group noted that music streaming could lose its appeal if catalogs become overly restricted or if prices go up. Exclusives may also have a market-damaging impact.
You can view the full report here.
Featured image by Jericho (CC by 3.0).