Q: What are some dynamics that make the music industry attractive from an investment perspective?
A: We believe the music industry not only has considerable opportunities for growth but has historically shown highly predictable revenue streams given the proliferation of streaming services which are recurring in nature.
By some estimates, the global music industry is projected to grow 7-8% per year reaching $150+ billion in 2030.
This begs the question, what is driving this growth and how is it defensible? We’d highlight three dynamics within the industry:
- Cash flows associated with music royalties have become noticeably predictable in nature due to the proliferation of streaming.1
The majority of music revenues (69%) are driven by streaming platforms (Spotify, Apple Music, etc.) which have subscription-based revenue models.
Global recorded music revenue share by format - 2024
Source: IFPI Global Music Report 2025Music is often treated as a utility-like expense in households and is one of the last things to be cut from a budget, making it very price inelastic.
Global Recorded Music revenues, consumer spending and entertainment spending, 1998-2021
Source: Goldman Sachs Equity Research, Music in the Air 2024 Report. Decline in music revenue through the early 2000s was associated with illegal file sharing and progression from CD/vinyl sales to digital downloads.
- There is room for global expansion. The impact of streaming is still in its early innings, especially in emerging markets.
- Music fans are not only loyal to their favorite artists, but the advent of streaming has also allowed artists to be rediscovered by new generations and further expand their fan bases. There is a particular growth opportunity within emerging markets which only represent a small fraction of paid streaming revenue but have shown significant growth. For example, subscription streaming revenues have grown ~30% in Latin America and Africa and ~15% in the Middle East over the past year. Developed markets like North America and Europe, which have larger, more established subscription bases, grew in the mid to high single digits.2
Source: Goldman Sachs Equity Research, Music in the Air 2024 Report
- Music fans are not only loyal to their favorite artists, but the advent of streaming has also allowed artists to be rediscovered by new generations and further expand their fan bases. There is a particular growth opportunity within emerging markets which only represent a small fraction of paid streaming revenue but have shown significant growth. For example, subscription streaming revenues have grown ~30% in Latin America and Africa and ~15% in the Middle East over the past year. Developed markets like North America and Europe, which have larger, more established subscription bases, grew in the mid to high single digits.2
- There are a number of investment opportunities within subsectors of the music industry: Music assets associated with live events, concerts, film/commercial collaborations, music publishing and merchandising continue to broaden the opportunity set.
For these reasons, among others, we believe there is a strong investment thesis behind the music asset class and that it plays a meaningful role in the broader sports, media and entertainment ecosystem.
