In a recent report issued on June 3, Goldman Sachs has revised its projections for the music industry's global growth over the next five years. The investment bank also adjusted its forecast for this year's worldwide recorded music revenues. According to the report, the global music sector is now expected to generate $31.4 billion in net revenues by 2025, marking a decline of $2.5 billion from its previous estimate for 2024. This revision reflects an average growth rate of 6.8% from 2025 to 2030, which is lower than the previously projected 7.6%. Key factors contributing to this downward adjustment include slower growth in last year's recorded music revenues and reduced ad-funded streaming expansion.
Goldman Sachs attributes these changes primarily to shifting consumer preferences and emerging market dynamics. In particular, analysts point out that fewer consumers are engaging with longform video content, opting instead for shortform alternatives. Additionally, emerging platforms are generating less growth upside, while near-term uncertainties further impact the industry. These trends have led to a recalibration of expectations regarding subscriber numbers and average revenue per user within streaming services. Ad-funded streaming growth is anticipated to slow significantly, dropping to 5.7%, compared to the earlier prediction of 11.3% for 2024.
Despite these adjustments, Goldman remains optimistic about the resilience of music rights and companies, even amid challenging macroeconomic conditions. Analysts suggest that more frequent price hikes for streaming subscriptions and personalized service offerings could bolster industry performance. For 2025, the firm anticipates a 7.7% increase in global music industry revenue, slightly down from its prior projection of 8.3%. Growth in live music and slight improvements in recorded music revenue are seen as key contributors to this outlook.
The findings align with other reports this year, including IFPI's data indicating that global recorded music growth in 2024 was only half of what it was in 2023. Similarly, the RIAA noted that U.S. streaming revenue growth slowed to 3% in 2024, compared to 7.7% in the previous year. Looking ahead, Goldman forecasts a compound annual growth rate of 4.8% for the music industry between 2031 and 2035. While growth may be tempered, the industry appears poised to adapt through strategic pricing and service innovations.
Amid evolving market dynamics, the music industry continues to navigate a landscape marked by both challenges and opportunities. Although growth forecasts have been adjusted downward, there remains optimism surrounding the sector's ability to innovate and maintain value. By embracing new strategies and adapting to consumer preferences, stakeholders in the music industry can position themselves for sustained success in the coming years.
