Streaming is about to bring lots of revenue to the global music business and rightsholders are about to see a huge return to their works. In the latest report from Goldman Sachs, it predicts that music streaming will reach $28 billion by 2030 – an increase of 16% on its previous forecasts for global revenues.
In another optimistic review by IFPI, global streaming revenues recorded a hike of $4.56 billion last year, which means it is up 60.4% in 2015. And by 2030, Goldman Sachs predicted a hike of more than 500% in total global revenues for streaming alone. Subscribers are starting to see the perks of paying to stream and it is also forecasted that total subscribers will up 847 million by 2030.
Goldman has its valuation of Sony Corp by 2% to $51.60 [¥5,600], which saw the financial firm reportedly calling the Japanese company “an undervalued giant content” just some months ago.
As for Universal Music Group, Goldman has also increased pushed up its valuation of the giant label from €16.8 billion to €19.5billion ($23.5bn) – an increase of 16%. This increase means that Sony Music and UMG will “receive 55%-60% of royalties for every piece of work that is being monetised” in the future. Investment banks have forecasted the Universal Music Group to be valued at $22 billion last April and are worth three times more now.
Vivendi was also part of the discussion and saw Goldman increasing its price target to €25.20 per share – an increase of 8%.
IFPI reported an increase of $16.7 billion in the global recorded music industry in 2016 – an increase of 5.9%. This may also partly due to the opening up of China’s music industry. With an online user base of 650 million people and a growing number of licensed digital services, more major internet companies are moving to secure licensing deals with major recording companies. Sony and Warner and a number of leading Taiwanese independent labels signed an agreement with Tencent in 2014.
Ed Peto of the China-based music industry consultancy Outdustry Group said: “Just the simple fact that there is a paid model in China now is an incredibly positive development, but it was always going to need time to develop. The difficulty at the moment is that consumers can still get everything they want for free.”
According to informal sources, Chinese-language music accounts for around 80 per cent of the market and K-Pop and J-Pop for 10 per cent, with the remaining 10 per cent going to international repertoire.
Article courtesy Music News Asia