Goldman Sachs releases battered Music in the Air report – while sticking to its annual sales forecast of over $150 billion for 2030

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A distant shot of the Goldman Sachs Tower in Jersey City, New Jersey. Credit: Jordan Merrick

Last year, in its annual Music in the Air report, Goldman Sachs predicted explosive growth in the music industry — worth $153 billion in annual sales by 2030. Well, after some questions about the bullish stance and the underlying numbers in particular, Goldman has released a 2023 report with watered-down forecasts.

By pointing to the possibility of annual industry revenues of a whopping $153 billion in the 2022 analysis — significantly higher than previously forecast of around $131 billion — Goldman made it clear that he believes streaming will show “no signs of saturation”.

Citing that optimistic view and the return of mass entertainment, Goldman last year also raised its 2022 revenue forecast (including earnings from sound recording, publishing and live performances) to $87.6 billion from $81.6 billion.

While this and similar “music in the air” forecasts are not implausible – the industry certainly looks vastly different today than it did in 2016 – they raised questions about the methodology, conclusions, inflation adjustments and the objectivity of the analysis.

Digital Music News then explored the issues (and highlighted Goldman’s related industry interests), explaining, among other things, the potential revenue byproducts of streaming subscription growth in developing markets, as well as the inherent unknowns associated with the emergence of unprecedented platforms and technologies.

With those ideas in mind, Goldman slightly reduced its 2030 industry revenue forecast to $151.4 billion in the 2023 edition of Music in the Air — and also lowered its 2023 forecast, this time from $94.9 billion, according to Music Ally to $92 billion.

More carefully communicated to the media than the 2022 report, Music in the Air 2023 also addresses an expected decline in recorded revenue for the year ($28.2 billion, versus $30 billion originally expected) and live -Revenue ($28.1 billion, vs. $29.1 billion). ), with a relatively modest increase in releases from $1 billion to $8.8 billion the summary of the said point of sale.

“The music industry is on the cusp of another major structural shift given the ongoing under-monetization of music content, legacy streaming royalty payout structures and the deployment of generative AI,” reads a section of the report described as “key” to capitalization this structural change “a more coordinated and collaborative response from key players”.

Elsewhere in the document, Goldman appeared to reiterate the Big Three’s views on the quality of content on streaming platforms and the perceived need for compensation reform, while also emphasizing the perceived potential of superfans to generate additional revenue.

Finally, Music Ally also pointed out that in the report, Goldman will give 6 percent of recorded music revenue in 2022 to “emerging platforms” like Facebook (about $361 million), Peloton ($267 million), TikTok ( US$220 million) and attributed to YouTube Shorts (US$126 million).

Those numbers come from expanded calculations of the disclosed data — or six percent of the $26.2 billion in revenue recorded in 2022, about $1.57 billion and the percentage share Goldman owns for each of the named “emerging platforms.” assigns. Perhaps the most notable statistic is on YouTube Shorts; YouTube officials previously estimated the video-sharing platform’s total annual payments to the music industry at $6 billion.