Goldman Sacks Off Streaming Report

According to a new report from none other than American multi-national finance company Goldman Sachs, music streaming revenues will jump by more than 500% over the next 13 years, hitting $28bn. The report also forecasts that total paid streaming subscribers will hit 847m by 2030- an increase of more than 700m compared to the end of 2016, with large payouts to the major rights holders on the cards.

As a result, Goldman has increased its valuation of Universal Music Group by 16% to €19.5bn ($23.5bn) from €16.8bn.

The Gen must raise an eyebrow to such claim. Lets take a step back for a moment- The IFPI reported this year that total recorded global streaming revenues reached $4.56bn last year, up 60.4% on 2015. The overall global recorded music industry revenues increased by 5.9% in 2016, up to $15.7bn.

It’s certainly a healthy picture and on the right trajectory, streaming is not just the future, it is very much the ‘now’, supplemented by the surprising ongoing persistence of physical formats. The industry has turned a corner, but to predict such growth seems foolhardy when serious issues remain. Spotify may have inked new deals with all major labels and those independents represented by Merlin, but the streaming giant also recently seemed to question if mechanical royalties are even due on a stream.

There is also the larger elephant in the room of Spotify, now unquestionably the major streaming player with over 60 million paying subscribers, can even get to a point of profitability despite growing the numbers.

Perhaps The Gen should have more faith- it’s not like investment banks have a history of over inflating value only to be proved drastically wrong with catastrophic consequences now, is it?