Today music is everywhere, an infinite library at our fingertips, thanks to the streaming revolution. As consumers embrace a bounty of choices, the music industry has emerged from a rough transition to the internet era, expanding like never before: Goldman Sachs projects that music revenue will nearly double to $142 billion by 2030. What’s behind the numbers? Today OZY and Goldman Sachs are diving into what’s next for the music business, from the sources of this new cash and the impact of COVID-19 to the newest platforms you need to know now. Read on for more.
This is the way we listen now. Just as vinyl gave way to CDs, individual downloads are out and streaming services are taking over: 82 percent of Americans between the ages of 16 and 34 reported listening to a streaming service in 2019. Goldman Sachs projects that 21 percent of the world’s smartphone users will be streaming music by 2030, adding up to a $75 billion market of 1.2 billion paid subscribers.
These sunny growth numbers are due in large part to the massive global opportunity that awaits the streaming business. Spotify operates in 79 countries, compared to 194 countries for Netflix. New players such as ByteDance and Amazon Music are jumping into the fray and will boost the overall pool. And the rise of smart speakers gives consumers a new way to listen.
You should prepare to pay more for your music. While services like Netflix have seen price increases, Spotify has essentially remained unchanged for a decade, at $9.99 per month, the same price charged by Apple Music and Deezer. Lisa Yang, head of Goldman Sachs’ European Media and Internet Research, says price hikes are a big driver of Goldman’s growth projections for the industry. “At some point the market will be mature enough to start absorbing more meaningful price increases,” Yang says.
The biggest opportunity for streamers is in emerging markets — where smartphone use is exploding. But as Spotify and Apple try to make inroads in North Africa, they’ll have to contend with an entrenched rival: YouTube. The Google-owned company cultivated the region early and has become dominant thanks in part to a simple interface for artists and a visually oriented consumer base. Still, expect fierce competition among the tech titans in the years to come.