The music industry now has more reasons to be elated about its future, according to the latest forecast report by investment banking firm Goldman Sachs.

New Estimates Bring Good News

A new equity research report, called 'Streaming Crescendo; Raising Our Industry Forecasts', issued by investment banking firm Goldman Sachs, has forecasted that the recorded music market will hit $45 billion by 2030. This spectacular growth in the music industry will be driven by 1.15 billion users paying for music-streaming subscriptions. Music streaming will also achieve 40 percent penetration in developed markets such as the United States. All of this is great news for the big players in the music industry, as reported by Rolling Stone. According to Goldman Sachs' latest report, by 2030 the global recorded music industry will be pulling in $45 billion annually. The report also states that paid streaming will generate $27.5 billion for labels and artists in that year. The overall annual global trade streaming revenues will reach $37.2 billion. Putting these figures in context, in 2018, according to IFPI data, the recorded music industry generated $19.1 billion globally of which 37% (around $7 billion) was derived from paid streaming services.

Goldman Ups Prediction

Goldman Sachs' 2017 report, called 'Music in the Air', forecasted the global recording industry pulling in $44 billion in 2030. The latest report has upped the prediction by $1 billion owing to "faster-than-expected paid streaming adoption". The investment banking firm also revised its numbers for paid streaming. According to the report, subscriptions will generate $27.5 billion in 2030 as opposed to its previous estimate of $27.1 billion. Paying subscribers in emerging markets will stand at 778 million in 2030 as opposed to the 530 million previously thought. Goldman further predicts that in 2030 there will be 1.15 billion paying streaming subscribers globally. In the last report this number was thought to be 901 million. Within this 1.15 billion number, over two thirds of subscribers (68%) will come from 'emerging markets' rather than 'established markets'. Because of this growth in emerging markets, global annual ARPU (Average Revenue Per paying User) from music streaming will continue to fall significantly; down from $32.70 in 2018 to $27.30 in 2023 and $24.60 in 2030.

Why Will ARUP Fall?

Music streaming platforms keep aggressively pushing discounted subscription plans to certain demographics, such as families. Streaming services also bundle with other companies’ entertainment offers to attract new users. The Goldman Sachs report says "faster subscriber adoption at the expense of short-term ARPU trends is a longterm positive for all players in the ecosystem" that will drive down rates over time.

Which Service Will Dominate?

The update predicts that in 2030 Spotify will remain global market leader with 32 percent market share of streaming subscribers. This is down from the 38 percent Spotify registered in 2018. The report also predicts that while Spotify and Apple Music will remain industry leaders, their share will erode over time to 32 percent and 16 percent in 2030, respectively. This is down from the 2018 status quo of 38 percent and 20 percent. Global internet players such as Amazon, YouTube and Facebook will rise from 10 percent to 14 percent in that same period. Goldman also forecasts that the China-based Tencent Music will see its share of global paid users to jump from 11 percent last year to 23 percent in 2030.