Goldman Sachs says Universal Music Group is worth more than $ 50 billion

The MBW journal is where we shine our microscope on some of the biggest recent activity in the music business. This time we flip through Goldman Sachslatest must-see report on the music industry. The MBW journal is supported by Instrumental.

If there’s one music industry report that sets the industry’s expectations more than anything these days, it’s this one from Goldman Sachs. Music in the air.

The financial firm released its latest paper update this week, which was obtained by MBW.

It contains sunny forecasts for the recording industry for years to come… and the most worthy of them may demand Universal music group boss Sir Lucian Grainge to put on your sunglasses.

Goldman Sachs, via the new Music in the air, raised UMG’s valuation from 30 billion euros to 44 billion euros.

The latter figure is roughly equivalent to $ 53 billion at current exchange rates.

Setting the story of Universal aside, there are some interesting industry-wide predictions made in the latest Music in the air, which is co-authored as always by Lisa Yang (Managing Director, Media and Internet, based at Goldman in London).

“We anticipate a faster transition to music streaming and greater monetization of music content from new formats (eg short video, connected fitness, games, etc.), a trend that has been further accelerated by the pandemic, ”the newspaper read.

Lisa Yang, Goldman Sachs

“The value of music catalogs will continue to increase, attracting more and more capital into the space.”

Goldman Sach’s latest Music In The Air report, written by Lisa Yang et co.

Goldman also predicts that “the digital distribution landscape will likely remain competitive and fragmented” in the years to come with “Amazon, Youtube and Tencent Music, the main stock winners “, while predicting that the three big music companies” will retain their dominant positions but will face some dilution of their market shares in a context of the rise of emerging artists and intermediaries ”.

The company’s other key prediction shouldn’t come as a shock to anyone who has recently read MBW: “The value of music catalogs will continue to rise, attracting more and more capital into the space.”

The latest update of Music in the air benefits from being able to base its forecast on concrete / official music industry revenue figures for 2020, thanks to the Latest IFPI World Music Report.

As such, Music in the air Now predicts that the global recorded music industry will see its commercial revenues increase by nearly $ 2 billion in 2021, from $ 21.6 billion last year to $ 23.5 billion this year.

The engine of this growth, the newspaper predicts, will be music streaming.

Goldman predicts that paid music streaming (in terms of gross revenue) will generate $ 21.1 billion in 2021.

This is $ 3 billion more than the $ 18.1 billion generated by paid streaming platforms in 2020.

The ad-supported streaming market suggests Music in the air, will increase this year from $ 7.6 billion in 2020 to $ 9.2 billion in 2021.

The music publishing market, hampered by lower performance royalty payments due to the pandemic lockdown, will grow in 2021, but not by much, suggests Goldman – with commercial revenue dropping to $ 6.2 billion. dollars this year compared to $ 6.0 billion in 2020.

And the live music market, obviously the sector hardest hit by Covid-19, will generate $ 12.7 billion this year, Music In The Air predicts, compared to just $ 4.8 billion in 2020.

The $ 12.7 billion forecast for 2021 is lower than Goldman’s previous forecast of $ 18.3 billion, in part due to “the later than expected resumption of live events.”

The Goldman Report prediction that is most likely to catch the attention of music industry prospectors on rods concerns global music streaming subscribers.

As confirmed by IFPI, that number rose to 443 million in 2020.

Goldman Sachs predicts that figure will exceed 500 this year, to 527 million.

By 2023, it will reach 697 million, according to Music in the air, and by 2030, it will easily have surpassed 1 billion paying users to 1.279 billion.

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MBW Magazine is supported by Instrumental, which powers the online scouting of A&R and talent teams within the music industry. Their leading scouting platform applies AI processes to Spotify and social data to find the fastest growing artists and leads every day. Get in touch with the Instrumental team to find out how they can help boost your testing efforts.Music company in the world

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