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Three Fundamental Facts About the Future of the Music Business
Music, being fundamental to human experience, will propel streaming to new heights in access and monetization, while superfandom accelerates the growth of music industry economics
Universal Music Group (UMG) held its 2024 Capital Markets Day in London yesterday, where leaders from across the company’s global business touched on UMG's successes, current standing, and the creative and business opportunities within the global music industry—one that particularly intrigued me. UMG CEO, Lucian Grainge, speaks on three fundamental facts, based on what UMG, the world’s largest music rightsholder, has learned about the future of the music business:
Streaming is a quantum leap forward in music access and monetization.
Super fandom will accelerate music industry economics.
Music is fundamental to human experience
In essence, the connection people have with music is driving both technological and economic progress in the industry but let’s break it all down.
Fact 1: Streaming is a quantum leap forward in music access and monetization
Streaming has, for sure, advanced music access and monetization, fueling industry growth for years on end. For consumers, streaming offers unparalleled access to all the world's music, personalized and shareable, while for the music industry and digital service providers (DSPs), it provides exceptional value creation opportunities.
Lucian Grainge introduced the concept of "Streaming 2.0," which promises even greater value as hundreds of millions of consumers move from one-time purchases to paid subscriptions, expanding the total addressable market (TAM). With over 600 million subscribers globally and a projected billion by the end of the decade, the growth potential remains enormous, particularly in both established and emerging markets. Looking ahead, Streaming 2.0 will bring…👇
Fact 2: Super fandom will accelerate music industry economics
Historically, superfans have fueled the industry, from lining up at record stores on release days in the '60s to '90s to driving 75% of digital sales on iTunes during the download era.
In the streaming era, while all listeners pay the same price regardless of engagement, superfans still demonstrate high passion through vinyl sales and merchandise. UMG sees the opportunity to develop new products and experiences to better monetize superfans' enthusiasm, bringing them closer to the music and artists they love. UMG is collaborating with Spotify to develop a new…👇
Fact 3: Music is fundamental to human experience
Music is indeed universal and the most enjoyed and influential form of media globally. It permeates all aspects of life, from work to leisure, uniting people and moving culture. Unlike other forms of media, music's relevance and impact continue to grow. It has historically catalyzed movements and genres and remains a universal language. The influence of music is evident, with half of the top 20 most-followed people on social media being recording artists.
