According to Goldman Sachs, the music industry is preparing itself for an absolute shift due to the evolution of generative A.I. The new and upcoming technology is all about providing “major opportunities” in the music sector.

It listed five stocks that are worthy of buying to be able to take part in the trend:

• Warner Music Group
• Live Nation
• Believe
• NetEase
• Universal Music Group

These above-mentioned stocks are topping the convection list of top stocks.

“Generative A.I. is to super-charge capabilities of music creation while increasing productivity,” according to a June 28th note by Goldman Sachs. They also suggested that the concerns of the investors regarding A.I. generated music is “overstated,” which included a track that was apparently created using the same technology featuring “fake Drake” back in April.

The analysts also noted that companies like Believe and Deezer are adapting to A.I. technologies to detect if a track has been created by A.I., whereas publishers are cordially working with Spotiy to take A.I.-generated music off the platform.

Goldman also reported that the music industry is keen on protecting its rights to intellectual property, where the industry is dominated by three prominent giants that own the majority of the artists’ profiles.

“We believe the music industry is on the cusp of another major structural change given the persistent under motivation of music content, outdated streaming royalty payout structures and the deployment of Generative A.I.,” added the analysts.

With streaming, it has become easier than ever for people to get their hands on music; however the revenue does not equate with the consumption, the analysts noted.

“For example, we estimate that the revenue per audio stream has fallen 20% in the past five years and that the revenue per hour streamed music for Spotify is 4x lower than for Netflix.”, the bank added.

Event promoters like Live Nation are well preferred by Goldman due to the frequency of the artist tours, which results in the globalization of music. It also added that the young generations are becoming more and more aware of the performers via social media will only help in boosting the profits of the industry.

Additional Resources:

Jack Dorsey Criticizes Meta’s Threads As It Prepares To Launch