Goldman Sachs: Global Music Revenue Will Drop 25% In 2020

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A distant shot of the Goldman Sachs Tower in Jersey City, New Jersey.

In a new “Music in the Air” analysis of the music industry’s outlook, Goldman Sachs projected that global music revenue will drop 25 percent this year, owing to the fiscal and operational strain of the novel coronavirus crisis.

As expected, 2020’s substantially lessened concert and live performance income played the biggest part in the predicted revenue drop-off; Goldman reduced its pre-pandemic earnings estimates for live music by more than 75 percent. The New York City-based investment powerhouse also anticipated lessened publishing revenue (five percent below previous estimates) and recorded music revenue (eight percent below previous estimates), culminating in total global music revenue of $57.5 billion.

For reference, 2019’s global music revenue totaled more than $75 billion.

Nevertheless, the report also signaled confidence in music’s ability to recover and continue growing in 2021 and beyond. In a prior “Music in the Air” breakdown, Goldman Sachs predicted that recorded music itself would produce $80 billion worth of annual income by 2030, whereas live music would generate $38 billion, and publishing $12.5 billion, each year.

Lisa Yang, Goldman Sachs’ European Media and Internet Research division and the author of “Music in the Air,” expanded on her new report in a video interview.

Yang emphasized the music industry’s post-2015 annual revenue growth, and the integral role streaming played in elevating the sums. She also cited streaming platforms’ heightened competition and perpetual improvements. The increasing popularity of connected, streaming-capable devices like smart speakers, and the entry of new industry players such as TikTok, caused Yang to double down on her long-term earnings projection.

While music streaming services’ Q2 2020 earnings reports and subscriber counts will be telling, results through this year’s first three months were generally encouraging. Spotify actually added six million subscribers during the period. Moreover, music streaming platforms boast more than 340 million worldwide paid subscribers – up from 100 or so million in 2016.

And in a further testament to streaming’s powerful growth, the RIAA revealed in its year-end report that stateside 2019 streaming revenue exceeded the income turned in by the United States’ entire recorded music market in 2017.