Goldman Sachs Tower. Photo Credit: Far Chinberdiev
Goldman Sachs’ 2026 “Music in the Air” report is here, and while the multifaceted breakdown is unsurprisingly bullish about the wider industry’s revenue trajectory, it offers a noticeably measured assessment of the major labels’ long-term outlook.
For those who’ve been following Universal Music’s (and to a lesser extent Warner Music’s) share-price woes, that position might not come as a surprise. While Goldman remains bullish about music’s overall growth prospects – meaning across recorded, publishing, live, and more – its stance varies significantly based on the company type and sub-sector at hand.
Live music, for instance, stands tall as “one of the strongest growth stories in media,” according to the report, which is banking on continued expansions through 2035. Similarly, good things are on the horizon for distributors – though when it comes to the actual “owners of music rights,” Goldman has acknowledged taking “a more selective approach.”
“Broadly, 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,” Music in the Air 2026 spells out.
Running with the curious point, which seemingly means those in the business of making music are in a precarious spot relative to those monetizing said music, DSPs have continued subscriber-growth and price-increase runway, the report indicates.
That’s because of their buildouts in developing markets, clampdowns on multi-user plans, and the addition of new features (with audiobooks, AI-powered tools, Reserved, and high-fidelity audio mentioned in particular), per the text.
(We needn’t dive into the proposed multi-user monetization approach here, but the general idea of charging “a modest fee” for each Family listener, not a flat rate per month for up to six users, might prove effective. On the other hand, it might also fuel cancellations.)
Moreover, ad-supported streaming will find a way to reverse years of not-great results, and “middle-tiers between free and premium” could prove effective as well, according to Goldman.
What about AI? As many know, there’s an inherent degree of unpredictability associated with analyzing the rapidly evolving technology at this early stage of the game.
But in short, Goldman is forecasting near-term growth (albeit with the possibility of long-term risks), estimating that “AI-related licensing, creation tools, and new monetization opportunities have the potential to drive ~10% upside to Recorded Music revenues by 2035,” the report reads.
Bearing all these factors in mind, Music in the Air 2026 anticipates a 5.9% compound annual growth rate for recorded music revenue through 2035, to $56.1 billion. And this marks “the first time since 2022” that Goldman has upped its recorded forecast.
That percentage is a bit beneath CAGR “subscription streaming rightsholder revenue” of 7.1% through 2035 but slightly above the expected 5.8% CAGR for recorded, publishing, and live alike.
Following the calculations to their logical conclusion, at the intersection of forecasted revenue spikes and the mixed outlook for labels themselves, the nearly 100-page report dedicates a good amount of ink to exploring the perceived market-share risks presented by gen AI.
“As Gen AI significantly lowers the barriers to entry for music creation, record labels face a structural risk of market share dilution,” one section states. “The traditional royalty payout model could be pressured as millions of AI-generated tracks entering the music streaming ecosystem divert a portion of the royalty pool away from human-created IP.”
Of course, as in prior years, the predictions should be taken with a grain of salt; some of the underlying calculations merit closer scrutiny, for one thing. And who knows precisely what the industry and the broader entertainment space will look like in a year, let alone a decade from now?
But especially because it’s front and center in the report, the idea that industry growth won’t necessarily coincide with label growth is worth keeping in mind moving forward.
