Goldman Sachs anticipates 75% drop in live music revenue

The company shared the figure in a recent analysis report of the music industry called Music in the Air, which gives estimates about the global industry in terms of live music, recorded music and publishing revenues. The updated outlook was adjusted to reflect the impact of the novel coronavirus (COVID-19) crisis.

In addition to the severely impacted live sector, the bank projects that global music revenue will plunge 25%. Publishing revenue and recorded music revenue were reduced 5% and 8% respectively below previous estimates, culminating in total global music revenue of $57.5bn this year.

But not all is doom and gloom. The bank's analysts expect a strong rebound over the longer term driven by growth of paid streaming, growing demand for music content and live events, new licensing opportunities, and positive regulatory developments.

The report also shows that the online streaming market could garner 1.2 billion users by 2030. The market was reported at about 341 million paid subscribers last year.

Global music revenues are anticipated to reach more than $140bn by the end of the decade, reflecting more than an 85% increase compared to last year’s $75bn figure.

It singled out major music rights holders Universal Music Group and Sony Music as the “main beneficiaries” of streaming growth and improved monetisation of music content.

“The streaming platforms also stand to benefit from the rising adoption of music streaming and their vast amount of consumer data, although competition will likely intensify: we prefer leading, scaled players such as Spotify and Tencent Music,” Goldman Sachs wrote in the report.

“Meanwhile, we believe YouTube is particularly well-placed to capture the growing usage and monetisation of music videos through both advertising and subscriptions.”

The company’s analysts said time spent listening to music “may shift away from music streaming to other forms of entertainment in the short term.” However, “we believe the industry’s long-term growth outlook is intact.”

In the previous pre-coronavirus Music in the Air report, Goldman Sachs predicted that recorded music would produce $80bn in annual income by 2030, while live music would generate $38bn, and publishing $12.5bn, each year.

The head of Goldman Sachs’ European Media and Internet Research division and the author of Music in the Air, Lisa Yang, said in an interview that streaming platforms’ heightened competition, perpetual improvements and the entry of new players like Resso, by TikTok owner ByteDance, caused her to double down on her long-term earnings projection.