The music world is hitting a sour note right now, but new research finds streaming is key to keeping the industry alive.
Goldman Sachs’s new “Music in the Air” report forecasts that, in 2020, the music sector will see a 25% drop in global revenue and a 75% plunge in live music revenue.
The latter is due to the COVID-19 shutdowns, which have silenced singers and music artists who make a good chunk of their income from stage performances. (Goldman Sachs cites 2016 data showing that 52% of consumers’ spending on music is for live events.) The restriction is even more amplified in summer, the season known for both concerts and music festivals.
But Goldman Sachs sees a bit of vivacissimo news in all this: Streaming revenue is predicted to rise 18%.
The firm anticipates 1.2 billion streaming subscribers in 2030 versus the 341 million last year. Plus, streaming is especially popular among 16- to 24-year-olds, a vital demographic; 80% of that cohort listen to audio streaming versus 65% of the general population.
“What streaming does well is the ability to both let us pick the music we want and to introduce us to new songs, artists, and even styles of music. There is a low entry fee for putting on a playlist or selecting a new station that is recommended for us,” Matthew Zawadzki, an assistant professor of psychology at University of California-Merced, said. “Although some of us are happy to keep the same album on for weeks at a time, others go to streaming for the variety. And variety is often really important to us.”
And when the bans on public gatherings are lifted, the music industry will start to recover. For example, 79% of fans said they expect to return to live events within four months of those restrictions ending, but they won’t fully leave streaming behind, the report finds. Seventy-four percent said they’d still watch live-streaming events post-coronavirus.
Accelerating a shift
“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,” the report finds.
The forecast is for the industry to hit $142 billion in revenue by 2030, up 84% from $77 billion in 2019.