Goldman Sachs laid out a broadly positive revenue trajectory for the music industry in its 2026 "Music in the Air" report, while adopting a noticeably more cautious stance on the long-term prospects facing the major labels. The bank's view of music's long-term trajectory remains broadly favourable — spanning recorded output, publishing rights, live events, and adjacent areas — though the degree of optimism shifts depending on which company type or sub-sector is under consideration.
The document projects that live music will keep expanding through 2035, describing the sector as one of the fastest-growing areas within the broader media landscape. The report positions distributors of music and audio, along with live entertainment businesses, as broadly preferred holdings, while rights-holding entities attract attention on a case-by-case basis rather than as a category-wide bet.
According to the report, room for further subscriber growth and price increases remains available to digital streaming platforms, driven by their expansion into emerging markets, enforcement of restrictions on shared account access, and the rollout of added capabilities — among them audiobooks, AI-powered tools, and high-fidelity audio. Goldman's analysis points to ad-supported streaming tiers — particularly the middle-ground options sitting between free access and fully paid plans — as forces capable of reversing a stretch of below-expectations results.
Goldman's "Music in the Air 2026" report puts recorded music revenue on a path to $56.1 billion by 2035, a compound annual rate of 5.9% — the first upward revision to that forecast since 2022 — while projecting that AI-driven licensing, creation tools, and fresh monetisation avenues hold the potential to add roughly 10% on top of that figure over the same horizon, even as the bank flags the possibility of longer-term risks tied to the technology. Forecast figures place that rate just under the 7.1% compound annual growth projected for subscription streaming rightsholder revenue through 2035, yet it still clears the 5.8% blended rate anticipated when recorded music, publishing, and live sectors are weighed together.
The roughly 100-page document reserves a substantial portion of its analysis for the competitive threats that generative AI tools are thought to pose to established labels. One passage notes that easier music production through AI technology exposes record companies to a dilution of their market position, and that royalty pools distributed across streaming platforms may shrink for human-made recordings as machine-generated tracks multiply — a tension the report flags as a central factor in assessing whether broader industry expansion will translate into equivalent gains for labels themselves.
