A decade after first framing streaming as music's growth engine, Goldman Sachs Research returns with a sharper question. In Music in the Air: 10 Years On1, Stephen Laszczyk and the team argue that "the industry's investment debate has solidly evolved from one centered primarily on streaming adoption toward one focused on monetization." The adoption story is largely written. The pricing story is just starting.
Why Raise Now?
For the first time in years, the forecast moves up. The team notes plainly, "This year's report marks the first time since 2022 that our industry estimates have been revised higher." Goldman now projects global music revenue growing 6.7% in 2026 and at a 5.8% CAGR from 2025 to 2035, rising from $112.5B to $198.1B. Recorded Music rightsholder revenue is expected to climb from $31.7B to $56.1B.
To be fair, 2025 was a mixed scorecard. The overall market grew just 4.4%, against a 7.7% expectation, as Live Music managed only 0.5% growth versus a forecast 10.5%. Recorded Music, however, beat by 60 basis points, growing 6.4% in constant currency. The surprise was physical. Physical sales rose 8%, the fastest of any format, reaching $5.4B, the highest since 2013, with vinyl up 13.7%. Sync and performance rights, by contrast, disappointed.
Where Is the Puck Going?
Toward pricing, and toward emerging markets. Paid subscribers are forecast to grow from 837M to 1,525M by 2035. Developed-market penetration rises from 42% to 55% of internet users; emerging markets move from 10% to 15%, supplying up to 75% of net additions. Yet the ARPU gap is stark: roughly $12 per year in emerging markets against $30 in developed ones.
In developed markets, the team says, "We expect major DSPs will adopt a price increase cadence every ~12-24 months." Family plans offer hidden upside; repricing them 20% higher implies a 4% lift to developed-market subscription revenue. Global ARPU, however, grows only 0.6% annually, diluted by bundles and multi-user plans.
Does AI Help or Hurt?
Both, depending on the horizon. Goldman views Artificial Music as "a net near-term positive for music rights holders," with a base case of roughly $3.3B in AI creation revenue, about a 10% lift to subscription streaming by 2035 (3% bear, 20% bull). Longer term, the picture is murkier. The team warns that "generic, functional, and background-oriented music categories face greater disruption risk," while superstar catalogs remain most insulated.
Can Free Listening Finally Pay?
Not yet. The team concedes "ad-supported music has yet to establish itself as a meaningful long-term value driver." Their prescription is sharper segmentation: an ad-light tier at roughly $1 to $2 could add high-single-digit upside to ad-supported revenue by 2035, while pushing more listeners toward paid plans.
Who Captures the Value?
Here the framework is explicit: "we favor distributors of music and audio, as well as live entertainment businesses, over owners of music rights, where we take a more selective approach." Live remains a structural winner, described as "one of the clearest examples of consumers prioritizing experiences over goods." Direct-to-consumer fan platforms could grow from tens of millions to hundreds of millions in revenue.
What Could Go Wrong?
Elasticity. "We see this risk intensifying as base tier prices approach $20," the team cautions, citing competition from short-form video and gaming. Regulation also looms, as advance-notice rules turn passive price increases into active cancellation decisions. It is simply too early to tell how far pricing power stretches.
The conclusion is confident but conditional: music's next decade rewards those who own the customer relationship, not merely the song.
Based on Goldman Sachs Research, Music in the Air, October 15, 2026.
5 Key Takeaways for Advisors and Investors
- Monetization over volume. Growth now depends on pricing, tiering and ARPU, not raw subscriber adoption.
- Distribution beats ownership. Goldman favors DSPs and live entertainment over rights owners, where selectivity matters.
- AI is a near-term tailwind. A base case 10% lift to subscription streaming by 2035, with longer-term risk concentrated in generic, functional music.
- Emerging markets drive volume, not yet value. Up to 75% of net adds, at ARPU roughly 2.5x below developed markets.
- Watch the $20 ceiling. Price elasticity, bundling dilution and consumer-protection rules are the key risks to the pricing thesis.
Footnote:
1 Laszczyk, Stephen, et al. "Music in the Air: 10 Years On: Recomposing the Narrative around AI, Pricing, and Opportunities in Ad-Supported and D2C." Goldman Sachs Research, Goldman Sachs, 15 Oct. 2026, https://www.goldmansachs.com/pdfs/insights/goldman-sachs-research/music-in-the-air-10-years-on/report.pdf.
