Goldman Sachs revel their predictions for the year 2030 with music streaming set to rule the market
Multi-national investment firm Goldman Sachs have revealed their predictions for the forthcoming years through their 'Music in the Air' report. According to the report, the global recorded music industry will be earning $45bn annually by the year 2030 with streaming services set to rule the market by becoming top earners. Paid streaming services will generate $27.5bn for labels and artists and overall streaming revenue including ad-funded revenue will reach $37.2bn. The firm further predicts that 1.15bn will start paying for streaming subscriptions by the year 2030 Goldman with 68% coming from "emerging markets".
Other important takeaways from the newly released dossier are
1. ARPU (Average revenue per user) will continue to decline over the years from from $32.70 in 2018 to $27.30 in 2023 and $24.60 in 2030. This will be largely due to streaming platforms offering discounted packs and services.
2. Paid music streaming subscribers will rise up to to 690M by the year 2030. The repost states that millennials are opting to pay for streaming services like never before
3. Market share percentage of Spotify & Apple will erode over time down to 32 percent and 16 percent in 2030, respectively — from 38 percent and 20 percent according to 2018 numbers.
4. Even though the report suggests that there will be a decline in the market share for Spotify, it will continue to rule the music streaming world with 32% market share of global streaming subscribers, down from the 38% it registered in 2018 followed by Apple Music.
5. Market share of other streaming services like Amazon, YouTube and Facebook will rise from 10 percent to 14 percent during the same period.
6. Biggest jump will be for China-based Tencent Music which will see its share of global paid users jump from 11 percent last year to 23 percent in 2030.
7. The proportion of people who stream music on their smartphones is growing day by day.
Threat due to Piracy
Piracy will still be a threat to global music industry if prices start going up. This will be largely due to artists pressuring streaming services to limit offers and increase premium subscriptions. Another threat might arise if streaming services start approaching artists directly which may lead to labels pulling their music catalogue off streaming services ultimately leading to piracy.
The report also gave out the current valuation for major music right holders - Universal Music Group to be around €25.1bn – €35.2bn (approx $28bn – $40bn).