The Music Industry’s Next Steps

Market Performance & User Growth

• The recorded music market, which grew for the first time in 2015, has seen year-over-year growth accelerate to an average of nearly 10% in recent years.
• Paid streaming subscribers have more than tripled from 100 million in 2016 to 340 million last year.
• Current paid streaming penetration stands at only 8% of global smartphone users, indicating significant upside potential.

Drivers of Streaming Expansion

• Growth has been driven by high consumer willingness to pay for quality products and content.
• Proliferation of connected devices, including smart speakers, has increased consumption volumes.
• New market entrants include major tech firms such as Amazon Music, YouTube Premium, and ByteDance (TikTok owner) launching paid services.

Pandemic Impact on Live Music

• Live music is the most severely impacted sector, with 70–80% of tours, concerts, and festivals canceled or postponed.
• The live music industry is forecasted to decline by 75% this year, with a recovery to 2019 levels not expected until 2022.
• Artist income losses are acute, as many generate 50–90% of revenue from touring.
• Industry recovery timing remains uncertain, contingent on global health and safety regulations.

Industry Adaptation Strategies

• Artists and labels are prioritizing social media presence for music discovery and promotion.
• Live streaming performances are being tested with monetization models including subscriptions ($1–$2 access) and advertising.
• Travis Scott achieved 28 million unique viewers in a virtual Fortnite concert, which subsequently propelled his new record to #1 on the Spotify Top 200.
• Record labels are increasing relevance by facilitating home recording, supporting direct-to-consumer (D2C) merchandise sales, and managing social media profiles.

2030 Long-Term Projections

• Streaming penetration is forecasted to rise from 8% globally to over 20% by 2030 (40% in developed markets, 17% in emerging markets).
• Average Revenue Per User (ARPU) is expected to increase following a decade of stagnation in US Spotify pricing, reversing a 10% year-on-year decline caused by family and student plan dilution.
• Combined factors of penetration growth and price increases are projected to quadruple streaming revenue from $20 billion to $75 billion by 2030.
• The total global music industry is projected to reach $140 billion by 2030, nearly doubling 2019 levels.
• Future growth drivers include live music returning to a 4–5% growth rate and recorded/publishing sectors growing at 5–7%.