After a long, long metaphorical winter, the music industry is finally growing again in 2016 for the first time in over a decade, thanks to streaming services like Spotify and Apple Music.
And it’s just the beginning, according to analysts at Macquarie, who predict that global recorded music revenues will double over the next 10 years.
In a note on Wednesday, the analysts wrote that they expect recorded music revenue to grow 5% in 2016, to ~$15 billion. By 2025, they predict that number will be $30 billion. That’s still down from the $40 billion it sat at in 1999, but it would be a monster comeback for an industry that’s been rocked for the last decade.
According to Macquarie, the driver of this revenue growth will be the continued ascendance of streaming services, from Spotify, to Pandora, to Apple Music, to Amazon’s new service. “ Streaming will grow to 50% of the market by mid-2019 and to 80% in 2025, based on our forecasts,” the analysts wrote. It will envelop the industry and pull revenues up with it.
As to the more immediate future, Macquarie thinks recorded music will grow 7% in 2017. And that’s a conservative estimate, according to Macquarie.
“We see upside to this level if Spotify’s launch in Japan, the second-largest territory and the one with the highest percentage of sales from physical, is successful,” the analysts wrote. “Amazon Unlimited Music (including mid-tier price point with Echo) should also boost growth in the UK and Germany (also a large physical market). Pandora Plus may also support even higher growth in the US.”
Here is a chart from Macquarie showing the predicted music industry growth: