Why Goldman Sachs believes Spotify will continue to lead in music streaming by 2030

In the world of music streaming, Spotify remains a key player, and Goldman Sachs predicts it will maintain its leadership well into the future.

In the world of music streaming services, one name has consistently held the crown: Spotify. While 2023 has seen its fair share of challenges, including job cuts affecting 800 employees, Spotify’s growth in market capitalisation paints a positive picture. According to data from YCharts, its market cap nearly doubled from $15.83 billion on January 3 to $30.9 billion on September 5, showcasing a promising trajectory.

But can Spotify maintain its dominance in the global music streaming landscape, especially in terms of paid subscriptions? According to Goldman Sachs, the answer is yes.

Goldman Sachs’ Music In The Air report, published in June, predicts that Spotify will retain its title as the largest music streaming service by global subscribers well into the next decade, until at least 2030. Even more impressively, Goldman anticipates that Spotify will maintain a steady market share of global paying subscribers at approximately the mid-30% level throughout the 2020s, despite its absence in the Chinese market.

Lisa Yang, Managing Director of Media & Internet at Goldman Sachs’ Global Investment Research, expressed the firm’s confidence in Spotify’s long-term prospects during a recent interview on the Music Business Worldwide Podcast. She emphasised that Spotify’s status as the most significant independent music streaming service sets it apart from competitors embedded within larger tech conglomerates.

Despite the proliferation of new streaming services and the resources of tech giants, Spotify’s global market share has remained stable, hovering around 41% to 42% since 2017, excluding China. Goldman Sachs predicts a slight decline to about 39% over time but believes that if Spotify were truly at risk of losing its leadership, it would have happened already.

Goldman’s numbers indicate that there were 589 million paying subscribers on music services globally at the end of 2022, with an expected increase to 663 million by the end of 2023. Spotify ended 2022 with 205 million global paying subscribers and, as of June 2023, boasted 220 million subscribers.

Furthermore, Goldman Sachs foresees YouTube Music as a strong contender to become the second-largest DSP (Digital Service Provider) by 2030, surpassing Apple Music. The report also suggests that the long tail of music streaming platforms, currently numbering around 200, may consolidate over time, resulting in a decline in their market share.

A wildcard in this scenario is TikTok Music, the newly-branded subscription music streaming service from TikTok. While it offers unique social features, its future growth remains uncertain.

Goldman Sachs’ analysis paints a positive picture for Spotify’s future, projecting its continued dominance in the global music streaming market well into 2030. Despite challenges and competition, Spotify’s strong position, innovative offerings, and market stability suggest it’s here to stay as the world’s leading music streaming service.

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