What’s the future of music royalties and revenue, and why does it belong in emerging markets?

Right now, somewhere in Lagos, São Paulo or Mumbai, a teenager is pressing play on their very first music stream. More than just another data point, that single stream is the first crack in a floodgate that could redefine the economics of music worldwide.

Here’s a number worth sitting up for: Goldman Sachs projects that by 2035, the global music industry’s revenues will double, driven not just by higher subscription prices in New York or London, but by billions of listeners in emerging markets who haven’t been tapped yet.

Those markets will account for 75% of streaming subscriber growth, marking a seismic shift in who controls the future of our industry.

Billions of listeners are waiting

In 2024, emerging markets made up 57% of net subscriber additions. By 2035, it will be three out of four. The staggering part is that streaming penetration in these regions sits at just 8% of the internet population. That means billions of untapped users who have yet to experience paid music streaming.

Goldman calculates that the annual emerging market average revenue per user (ARPU) sat at around $8 in 2024, compared to $31 in developed markets. This creates a volume vs. value paradox where massive subscriber growth pairs with significantly lower per-user revenue.

How will billions of new listeners in emerging markets reshape the way royalties are tracked, paid and audited? Micro payment systems will have to emerge in the marketplace to allow more artists to capitalize on their royalties. Therefore, the processing power in the background of these systems must keep up while crunching the numbers and performing analytics. 

The volume vs. value problem

Even in 2035, ARPU will remain materially lower due to subscription pricing, bundled telco deals and ad-supported models. The challenge is two-fold: capturing new subscribers through advanced revenue optimization that works at scale.

China shows it’s possible. Tencent Music increased conversion rates from 4.2% in 2018 to over 21% by 2024, demonstrating that tiered pricing and hybrid models are successful in price-sensitive economies.

International regulations and enforcement are key. Both Chinese and Indian markets have been characterized by a high level of piracy, with less regard for intellectual property tracking. Government pressure to punish negligence in rights tracking could lead to increased music monetization.

India's 200 million active users yield only 20 million paying subscribers. That’s a 10% conversion rate showing significant untapped potential. Companies can maximize revenue through bundling, tiered pricing and adjacent streams, such as live events and merchandise.

A publisher’s goldmine or nightmare?

This shift presents unprecedented opportunities and operational nightmares for publishers.

Opportunities include:

• Expanding catalogs across vast subscriber bases
• Premiums for localized, culturally relevant content
• Explosive sync demand from local advertising and gaming

Headaches include:

• Metadata chaos from inconsistent regional standards
• Volatile exchange rates reducing revenue predictability
• Collection societies resembling mazes more than infrastructure

Where piracy still rivals legal streaming, publishers must innovate with affordable, convenient licensing solutions or risk being undercut.

Going local, thinking global

Record labels face their own puzzle: discovering affordable, high-potential local talent while exporting genres like Afrobeats and K-pop globally. This demands nuanced A&R strategies that balance cultural authenticity with commercial viability, all while ARPU is half what labels are accustomed to.

Distributors rule everything around

I think distributors could emerge as the biggest winners. In fast-scaling regions, first movers dominate with disproportionate market share. Those bundling distribution, rights, analytics and collections into seamless offerings will command premium pricing.

The challenge? Building scalable systems handling high volumes across 200+ regional platforms while maintaining royalty transparency. Distributors solving the payments puzzle in underbanked markets will be nearly impossible to compete with.

Smart data, smart money

High-availability analytics will be key for emerging markets. Focusing on genres, artists or playlists that exhibit sustained analytical growth helps improve investment decisions.

I believe there are 4 areas where data-driven solutions separate winners from watchers:

1. Real-time revenue intelligence through multi-platform aggregation and AI-driven ARPU modeling, adjusting for currency volatility
   
   
2. Predictive analytics prioritizing territories via AI scoring and demand forecasting
   
   
3. Automated rights management using smart contracts and blockchain tracking for low-enforcement markets
   
   
4. Executive dashboard integration providing unified visibility into subscriber acquisition and market ROI

Infrastructure first, always

Where should companies prioritize investment? Infrastructure is first because it’s crucial for handling all future processing. Next, local partnerships should be established to gain inroads into developing markets, followed by expanding catalogs to encompass works that can be exploited.

India and Brazil have massive audiences, as well as established payment systems and collection societies. Start by collecting revenue reliably, then expand to riskier markets once you’ve proven your model. Currency controls and licensing requirements are regulatory landmines. Hire local legal counsel before launch, not after.

If you’re waiting for quarterly reports, you’re already behind. In emerging markets, speed is a matter of survival.

Winners don’t wait

The smartest players aren’t waiting for 2035. They’re already:

• Stress-testing infrastructure
• Partnering with collection societies
• Standardizing metadata validation
• Rolling out integrated royalty platforms
• Experimenting with tiered pricing

In mature markets, growth means charging more. In emerging markets, it’s about scaling, which requires operational transformation.

The next $200 billion in music won’t come exclusively from traditional sources. It will come from Lagos, Mumbai, Jakarta and beyond.

Truly successful companies will embrace complexity instead of resisting it, building transparency, trust and scale into their DNA.

To follow the money is to follow the future. Staying ready requires infrastructure built for what’s next.