Goldman Sachs has released a new report that offers an increasingly rosy outlook for the streaming economy. The analysis offers the latest outlook for the music sector through 2030, following on 2017 research that estimated that of global total music revenue of $41 million, $34 billion would come from streaming.
In the new Music in the Air report, Goldman Sachs has updated its forecast to global music revenue of $45 billion. It improved the paid streaming revenue outlook from $27.1 billion to $27.5 billion.
Also the audience of music subscribers is expected to reach 1.15 billion worldwide by 2030. The report anticipates that more than two-thirds of those paying listeners will be in emerging markets rather than the already established ones. Goldman predicted that the shift in demographics will be tied to a decline in average revenue per paying user, from $32.70 in 2018 to $27.30 in 2023 and $24.60 in 2030. Streaming on smartphones is projected to grow in both established and emerging markets. Developed markets are anticipated to see streaming on smartphones grow from 18% in 2018 to 37% in 2030, while emerging markets could more than triple from 3% to 10% in the same time frame.
The forecasts look dire for both physical formats and downloads in the Goldman assessment. The combined sources are expected to generate less than $2.5 billion in revenue by 2030.
In the infographic accompanying the report, Goldman noted that 76% of people who stream music consider “access to millions of tracks” either very or fairly important. Thus, it predicted that increased prices or labels withdrawing their music from streaming services could lead listeners to choose piracy over streaming.
Finally, the report gave some more specific predictions for key music companies. It noted Universal Music Group’s current valuation of between €25.1 billion and €35.2 billion ($28 billion to $40 billion). With the major label’s parent company in the process of seeking a buyer for up to 50% of UMG, the positive outlook could help the sale process. Goldman also anticipated that Spotify would remain the global market leader for audio streaming subscriptions through 2030 with a 32% market share.