A temporary pause
We believe revenue will slump 26% in 2020, largely due to the widespread disruption to live events.
But in the longer term, we expect a strong rebound as the crisis drives the offline to online shift.
Before lockdown, 40% of daily music consumption happened at work or in the car
Less commuter
listening
More are listening to music that they already know and makes them feel positive
Genre shift
Music video streaming in the US increased during lockdown, compared with the 8 weeks before
Music video streaming rising
US streams for artists such as the Beatles and Fleetwood Mac increased in March, suggesting a shift towards catalogue listening
Back to catalogue
tuning into new habits during lockdown
WE SEE SALES ALMOST DOUBLING BY 2030
$142bn
Global music revenue forecast
$77bn
2030E
2019
We believe the disruptions will…
Accelerate the offline to online music shift
82%
of 16-24 year olds in the UK consumed music on Facebook or Instagram in April 2020
Increase the importance of social media for music discovery and promotion
45%
of concert fans said they would continue to watch live streaming events even after physical events resume
Close the gap between the artist and fans
74%
Music streaming on TV and games consoles doubled during lockdown
More in-home, shared consumption
We believe global music industry revenue will slump in 2020, largely due to the disruption of live events
A surge in streaming subscriptions
We believe that 21% of smartphone users will be streaming music by 2030.
Paid subscribers
2030E
341mn
1.2BN
Key drivers of growth
New markets
Potential uptake
New players
Spotify only operates in 79 markets, compared with Netflix at 194
Only 8% of the global smartphone population paid for music streaming in 2019
New streaming platforms, such as Amazon Music and ByteDance, are entering the market
More streaming
devices
An increase in the number of streaming devices available, such as smart speakers, smartphones and tablets, is enabling easier music consumption
Prices may rise…
The average price of a standard music streaming subscription has remained unchanged at $9.99 for the past decade, while Netflix prices have risen around 5-8% every year over 2014-19.
As the streaming market strengthens, we expect music streaming prices to rise.
And here's where the money you spend on streaming goes...
Record labels typically receive the largest share of payment from streaming services, with royalty rates of 52%-58%.
Total DM
Total EM
Japan
USA
UK
China
Germany
18%
42%
3%
17%
6%
28%
21%
49%
22%
51%
3%
23%
14%
37%
Consumer
$10.00
Platform
$3.30
Labels
$3.80
Publishers
$0.60
Artists
$1.70
Songwriters
$0.60
$10
$5.5
$6.7
$1.2
$1-2
$0.6
Read the latest Music in the Air report for more on the future of the music industry
Access the report
Paid subscribers
2019
Compare the uptake in streaming across regions:
...followed by a strong rebound as the crisis drives the offline to online shift.
The global music industry has been hit by the Covid-19 pandemic, but the slump is likely to be short-lived.
The habits we’ve formed during lockdown, such as relying on social media and rediscovering old tracks, are set to accelerate the online shift and propel global music revenues to new highs.
The Show Must Go On
Music in the Air
of 16-34 year olds in the US reported using music streaming services in 2019
2018
Sources +
China Daily, “Xiongan New Area’s master plan: highlights” (April 2018)
City of Miami, “Miami Forever Bond Project to Mitigate Effects of Sea Level Rise” (March 2019)
Climate-ADAPT, “Room for the River Waal – protecting the city of Nijmegen” (April 2016)
“Copenhagen Climate Adaptation Plan” (2011)
Houston Chronicle, “Harris County voters pass $2.5 billion flood bond one year after Harvey” (August 2018)
Intergovernmental Panel on Climate Change (IPCC), “Climate Change 2014 Synthesis Report” (2014)
IPCC, “Global Warming of 1.5°C” (October 2018)
IPCC, “IPCC Special Report on Climate Change and Land” (August 2019)
New York State Department of Environmental Conservation, “Coastal Storm Risk Management Projects”
President’s Council of Economic Advisors and U.S. Department of Energy, “Economic Benefits of Increasing Electric Grid Resilience to Weather Outages” (August 2013)
San Francisco Chronicle, “SF’s Embarcadero seawall measure wins easily” (November 2018)
United Nations, “Factsheet: People and Oceans” (June 2017)
WYNC, “A Great Wall of Staten Island to Ward Off Hurricanes” (August 2015)
World Economic Forum, “Global Future Council on Cities and Urbanization”
XinhuaNet, “China approves 2018-2035 master plan for Xiongan New Area” (January 2019)
China Daily, “Xiongan New Area’s master plan: highlights” (April 2018)
City of Miami, “Miami Forever Bond Project to Mitigate Effects of Sea Level Rise” (March 2019)
Climate-ADAPT, “Room for the River Waal – protecting the city of Nijmegen” (April 2016)
“Copenhagen Climate Adaptation Plan” (2011) Houston Chronicle, “Harris County voters pass $2.5 billion flood bond one year after Harvey” (August 2018) Intergovernmental Panel on Climate Change (IPCC), “Climate Change 2014 Synthesis Report” (2014) IPCC, “Global Warming of 1.5°C” (October 2018)
IPCC, “IPCC Special Report on Climate Change and Land” (August 2019)New York State Department of Environmental Conservation, “Coastal Storm Risk Management Projects” President’s Council of Economic Advisors and U.S. Department of Energy, “Economic Benefits of Increasing Electric Grid Resilience to Weather Outages” (August 2013) San Francisco Chronicle, “SF’s Embarcadero seawall measure wins easily” (November 2018) United Nations, “Factsheet: People and Oceans” (June 2017)WYNC, “A Great Wall of Staten Island to Ward Off Hurricanes” (August 2015)World Economic Forum, “Global Future Council on Cities and Urbanization” XinhuaNet, “China approves 2018-2035 master plan for Xiongan New Area” (January 2019)
Sources -
Sources +
A TEMPORARY PAUSE: IFPI Global Music Report 2020, Music & Copyright, OMDIA, PWC, Company data, Goldman Sachs Global Investment Research
TUNING INTO NEW HABITS: Spotify, Nielsen, Media Research, Alpha Data, Goldman Sachs Global Investment Research
OUR LONG TERM GROWTH OUTLOOK: Nielsen, BPI, IFPI Music Consumer Study 2019, Bandsintown
A SURGE IN STREAMING: IFPI Global Music Report 2020, Goldman Sachs Global Investment Research
KEY DRIVERS: IFPI, Goldman Sachs Global Investment Research
PRICES MAY RISE: Company data, data compiled by Goldman Sachs Global Investment Research
WHO RECEIVES THE $10 YOU SPEND ON STREAMING?: Goldman Sachs Global Investment Research
Sources -
2030E