Christopher BarrettWith the live music industry having outperformed expectations in 2023, this year’s edition of Goldman Sachs’ (GS) influential Music In The Air report outlines an improved growth outlook driven by strong demand and supply.
The investment bank estimates that the industry grew 25% year-on-year in 2023, well ahead of its 6% forecast.
GS said its latest findings once again demonstrate the resilience of concert spending amidst elevated inflation and pressure on consumer spending, and the growing structural demand for experiences, particularly amongst Gen Z and Millennials.
This year, GS said it expects the live music industry’s growth to “normalise” with 6% year-on-year growth, given the tough comparisons: “Looking forward, we expect live music to remain an attractive market with a solid growth outlook, given strong secular demand and supply tailwinds.
“In 2024, we expect that the concert slate will mix-shift more towards smaller and mid-sized venues such as amphitheaters as global artists temporarily pare back touring following a busy stretch, and as some larger venues across Europe come offline for large events such as the Olympics and UEFA Euro 2024.”
On the supply side, GS expects to see longterm growth driven by the globalisation of music, with artists from anywhere in the world able to have a global fan base to tour to thanks to the proliferation of streaming, and stronger financial incentives for artists to tour – with top artists earning up to 95% of their income from touring.
GS suggested in the report that over the long term it believes that demand for live entertainment will be driven by i) supportive demographic and consumer trends, and ii) the increased awareness of and social value attributable to live events brought about by streaming and social media: “In our view, continued momentum even after a tougher 2022/23 consumer backdrop lends weight to our thesis that demand for live events has structurally increased on a global basis coming out of the pandemic, and is less cyclical compared to other types of consumer discretionary categories.
“Despite pressures on consumer wallets from inflation, rate increases, resumed student loan repayments, corporate layoffs and more in the last 12-24 months, which is when fans would have started saving for/planning to buy tickets for 2024, demand for tickets continues to be robust.”