According to a new report from Goldman Sachs, in around 11 years, nearly 1.2 billion people will pay for music streaming.
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 global recorded music market revenue 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 farfetched.
The investment bank writes,
“After nearly two decades disruption, the music industry is undergoing a massive revival. Artists, labels, and publishers are cashing in on the growing popularity 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 millennials and Generation Z music lovers spend more 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 all ages spend an average $152 to enjoy their favorite music.
Breaking down the proportion 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% 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 tracks.” 41% paying users consider this very important. 35% also consider a large catalog fairly important. So, music streaming could lose its appeal, forcing consumers to resort to piracy should subscription prices go up or labels choose to pull their catalog from a specific music platform.
You can view the full report here.
Featured image by Jericho (CC by 3.0).