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Music Industry: Difference between revisions
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=== Goldman Sachs === | === Goldman Sachs === | ||
==== 2022 ==== | |||
[[File:Music2.png|center|thumb|896x896px|https://www.goldmansachs.com/insights/pages/gs-research/music-in-the-air/report.pdf]] | [[File:Music2.png|center|thumb|896x896px|https://www.goldmansachs.com/insights/pages/gs-research/music-in-the-air/report.pdf]] | ||
Raised global music industry revenue forecasts to reflect a more positive view on pricing and revenue from emerging platforms that more than offsets the near-term potential impact of the weaker macro environment.<ref>https://www.goldmansachs.com/insights/pages/gs-research/music-in-the-air/report.pdf</ref> | Raised global music industry revenue forecasts to reflect a more positive view on pricing and revenue from emerging platforms that more than offsets the near-term potential impact of the weaker macro environment.<ref>https://www.goldmansachs.com/insights/pages/gs-research/music-in-the-air/report.pdf</ref> | ||
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* Expect consumer spend on music to remain resilient in a higher inflation/ weaker macro environment. Our analysis shows that music remains one of the most undermonetised forms of entertainment, with spending still 40% below its historical peak | * Expect consumer spend on music to remain resilient in a higher inflation/ weaker macro environment. Our analysis shows that music remains one of the most undermonetised forms of entertainment, with spending still 40% below its historical peak | ||
==== Streaming ==== | ===== '''Streaming''' ===== | ||
* Forecast 2021-2030E streaming revenue CAGR of +12% (from +11% prior), with volumes remaining the primary driver. | * Forecast 2021-2030E streaming revenue CAGR of +12% (from +11% prior), with volumes remaining the primary driver. | ||
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* Expect emerging platform revenues will represent 40% of ad-funded streaming revenues by 2030. | * Expect emerging platform revenues will represent 40% of ad-funded streaming revenues by 2030. | ||
* Expect further fragmentation amongst the top DSPs. Spotify expected to decline its market share. | * Expect further fragmentation amongst the top DSPs. Spotify expected to decline its market share. | ||
==== 2023 ==== | |||
Analysts at Goldman Sachs remain positive about future growth in the music business, despite reducing their previous prediction for market growth this year from 8% to 7.1%. Goldman Sachs thinks that the under-monetisation of music can be solved in several ways, including regular recurring price rises for streaming subscriptions, and more efforts to make money from superfans of artists.<ref>https://www.musicbusinessworldwide.com/peloton-paid-the-record-industry-more-than-tiktok-last-year-says-goldman-sachs-in-latest-music-in-the-air/</ref><ref>https://musically.com/2023/06/29/goldman-sachs-updates-its-music-industry-revenue-forecasts/</ref><ref>https://completemusicupdate.com/article/more-major-structural-changes-likely-as-music-industry-pursues-next-round-of-digital-growth-says-goldman-sachs/</ref> | |||
“The music industry is on the cusp of another major structural change given the persistent under-monetisation of music content, outdated streaming royalty payout structures and the deployment of Generative AI,” it explains. | |||
“In the wake of these developments, we believe a more coordinated and collaborative response from the main stakeholders will be key to ensure that the industry not only continues on its path of sustainable growth but also captures new business opportunities.” | |||
“We would expect the industry to work towards implementing price increases on a recurring basis, especially in an environment of higher inflation, and similar to the price increases adopted in other industries such as SVOD,” it claims, referring to subscription video-on-demand services like Netflix. | |||
* Goldman Sachs is now predicting that the global music market will be worth '''$92bn in 2023 rising to $151.4bn by 2030'''. A bit below 2022 forecasts. The n'''et figures are $65.1bn in 2023 and $104.4bn in 2030.''' | |||
* As Goldman points out in its latest ''Music In The Air'', it’s now forecasting an '''average CAGR of +8.6% for the recorded music industry between 2023 and 2030''', a figure which it calls “broadly unchanged” from its previous predictions. | |||
* The 2023 prediction includes $28.2bn of recorded music revenues, which is down from last year’s forecast of $30bn. However, the report predicts $8.8bn of publishing revenues this year, up from the $7.8bn it expected a year ago. As for the live market, Goldman Sachs thinks that will be worth $28.1bn in 2023, compared to its previous prediction of $29.1bn. | |||
* Looking forward, the company’s $104.4bn of predicted net revenues in 2030 includes $50.1bn from recorded music, $14.7bn from publishing and $39.5bn from the live industry. | |||
* Prediction for recorded '''music ''streaming'' revenue in 2023 has been pared down: Goldman now expects 2023’s global music streaming revenue (gross) to grow by 11.9% YoY (vs a 13.0% previous forecast).''' | |||
* '''Emerging platforms category accounted for 6% of global recorded music revenues in 2022''', which based on its figure of $26.2bn for the latter means around $1.57bn. It estimates that Facebook accounted for 23% of that revenue (so around $361m) followed by gaming generally (19% – $298m); Peloton (17% – $267m); TikTok (14% – $220m); YouTube Shorts (8% – $126m); Snapchat Spotlight (7% – $110m); and Instagram Reels (5% – $78.5m). | |||
* It predicts tha'''t ’emerging platforms’ will account for 14% of global recorded music revenue (up from 6% last year) by 2030.''' | |||
* Goldman is forecasting within its numbers that '''headline prices at music streaming services in developed markets (US, Europe etc.) will increase by an average of 3% per year over the next seven years.''' | |||
* If 20% of paid streaming subscribers today could be categorized as ‘superfans’, says Goldman, and if these ‘superfans’ were willing to spend double what a non-superfan spends on digital music each year, it implies a $4.2 billion (currently untapped) annual revenue opportunity for the record biz. That $4.2 billion figure, however, represents a ‘Total Addressable Market’ (TAM). | |||
== References == | == References == | ||