The music industry’s turning point

Market Outlook & Growth

• The global music industry is projected to reach over $150 billion in value by 2030.
• Since 2020, the industry has maintained a resilient growth trajectory of 8–10% annually, even amid macroeconomic headwinds like inflation.
• Goldman Sachs forecasts 1.2 billion paid streaming subscribers by 2030, driven by continued market penetration.

Consumption Trends & Demographics

• Global audio streams have increased 2.5x since 2017, reaching nearly 3.5 billion streams last year.
• Vinyl sales have seen a resurgence, recording a 30% CAGR over the last 15 years, contradicting predictions of physical media obsolescence.
• Gen Z and Millennials represent the highest subscription penetration, with >50% of 16–24 and 25–34 year olds subscribing to paid services, compared to only 26% of those aged 50+.
• Regional music (e.g., Latin, K-Pop) has surged globally; in 2022, 28 albums sold over 1 million units, up from just one in 2019.
• In the 2022 IFPI top 10 selling artists, >50% were non-English language acts, with only one representing the US, compared to six in 2020.

Pricing & Monetization Shifts

• After a decade of stagnant pricing, major platforms (Apple, Amazon, Spotify) initiated price increases in late 2022/early 2023, raising standard plans from $9.99 to $10.99.
• The average revenue per subscriber has declined 40% since 2016 due to the introduction of lower-cost tiered plans (student, family, economy).
• Goldman Sachs models a 3% annual blended price increase, estimating a 10% price hike every three years as standard.
• A "superfan" monetization strategy (charging double the average rate for 20% of streamers) could generate a potential $4 billion revenue uplift (approx. 25% increase to current forecasts).
• Premium tier offerings (e.g., Tidal HiFi Plus) and bundled services (audiobooks, merchandise, VIP access) are emerging as new revenue vectors.

Industry Structure & Royalties

• Major record labels remain dominant but are expanding contracts to include licensing, merchandising, and multimedia (e.g., documentaries) beyond traditional streaming rights.
• Independent artists are experiencing faster growth, particularly in non-English emerging markets where majors have less historical presence.
• Despite democratization allowing 120,000 songs to be uploaded to Spotify daily (up from 20,000 in 2018), revenue concentration remains skewed: 95% of Spotify revenue comes from <5% of artists.
• Current royalty payout systems are deemed outdated relative to the volume of content, with industry leaders expected to realign payouts to better reflect the value generated by specific songs or artists.

Artificial Intelligence (AI) Impact

• Generative AI is expected to further lower barriers to entry and boost content creation productivity, potentially accelerating the "explosion" of new song releases.
• AI may paradoxically raise the barriers to commercial success in an increasingly crowded ecosystem, reinforcing the necessity of major label resources for global scaling.
• Intellectual Property (IP) risks remain unresolved regarding training data; legislative frameworks and court tests are expected to take one year or more to establish clear guardrails.
• In the near term, major labels and streaming platforms are expected to self-regulate and control the deployment of AI-generated music before formal legislation catches up.

Live Events

• Live event revenues, which fell >80% in 2020, recovered to 2019 levels by late 2022, exceeding initial projections.
• The rebound was driven by supply-side pressures (artists needing tour income due to low streaming yields) and demand-side trends (social media stimulation and globalization of artist fandom).
• Live events are projected to return to single-digit annualized growth through 2030.

Forward-Looking Statements & Structural Changes

• The industry is approaching a turning point characterized by segmented offerings, monetization of super fans, and royalty system reforms.
• Goldman Sachs maintains a positive outlook, anticipating that recurring price hikes and superfan monetization will drive growth despite a potential saturation in developed Anglo-Saxon markets.
• Future growth will be increasingly fueled by non-English speaking markets and the rise of local/regional artists achieving global success.