Goldman Sachs Expects Global Music Revenue to Drop 25% for the Year - Rolling Stone
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Goldman Sachs Expects Global Music Revenue to Drop 25% This Year

The investment bank is optimistic about long-term growth in the music industry — but hits to the live sector in 2020 put revenue at a far cry from previous estimates

US singer H.E.R. performs on stage during the Coachella Valley Music and Arts Festival in Indio, near Palm Springs, California, USA, 21 April 2019. The festival runs from 12 to 21 April 2019.Coachella Valley Music and Arts Festival 2019 in Indio, California, USA - 21 Apr 2019

Coachella Valley Music and Arts Festival, spring 2019. Coachella 2020 has been rescheduled for October.


This time last year, the music industry was patting itself on the back for another year of sizable growth and profits that seemed to secure a rosy outlook for its future.

After enduring three unprecedentedly rocky months of cancelled concerts, shuttered venues, and other sectors of the industry grinding to a halt due to the global health crisis, this year’s forecasts are decidedly less optimistic. Investment bank and research firm Goldman Sachs, which puts out an annual report of revenue projections for the music industry, released a new study on Thursday that estimates the global industry — comprising live music, recorded music, and publishing — will pull in $57.5 billion in 2020, about 29% down from its original forecast. In 2019, that figure sat comfortably at about $75 billion.

The bank says in its new “Music in the Air” report that it is lowering original forecasts for live music by 76% (down to $7 billion), for the publishing market by 5% (down to $6 billion), and for the recorded music market by 8% (down to $20.8 billion). But Goldman is optimistic about a relatively quick recovery, expecting the live sector in particular to make a comeback in 2021 after a loosening of government restrictions on mass gatherings allows concerts to return. And despite the across-board drop, the firm says it still anticipates global industry revenue to soar to around $140 billion by 2030, driven by live shows and music streaming, in line with previous estimates.

Goldman Sachs, Music in the Air 2020 report

“We expect a strong rebound in outer years, with the live music industry nearly returning to its pre-COVID-19 level by 2022,” Goldman’s research team, led by media and internet equity research managing director Lisa Yang, writes in the report. Its long-term growth forecast predicts a massive 26% bump in 2021 and an 18% boost in 2022, with compound annual growth rate (CAGR) settling in at 6% for the period of 2019 to 2030.

The team also expects the circumstances of the pandemic to accelerate already-in-place “structural shifts” in music, which could benefit the industry — assuming, for instance, that more music fans in the time of quarantine will sign up for paid streaming, leading to a higher average revenue per user (ARPU) for streaming services that trickles over to more profit for labels, artists, and other players on the music creation side. “While user time spent may shift away from music streaming to other forms of entertainment in the short term, overall we believe the industry’s long-term growth outlook is intact, driven by the secular growth of paid streaming, growing demand for music content and live events, new licensing opportunities, e.g. TikTok, and positive regulatory developments,” Goldman says.

But any possibility of broader growth rests on the ability of live concerts to come back in full force — and also on music fans’ interest in actually attending those events.


Read next: How Coronavirus Is Wreaking Havoc on Music

In This Article: goldman, music industry


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