Music Merch Is Big Business, But It Won’t Deliver Big Growth

The merch booth is seen during Desert Trip at the Empire Polo Field on October 15, 2016 in Indio, Calif.

vinyl LPs, the global music merchandise business will grow to a retail value of $16.3 billion by 2030, according to a new report by MIDiA Research.for many artists in 2020 when the COVID-19 pandemic shut down the concert business. And as touring resumed and fans opened their wallets, the global merch business rose to $13.4 billion in 2023. But merch sales are expected to cool considerably, as MIDiA forecasts merch sales will grow at a compound annual growth rate of just 2.

Physical music, which MIDiA considers to be merch because many consumers treat vinyl LPs and CDs as collectible items, is forecasted to peak in 2025 and decrease through 2030. Physical merchandise such as artist-branded apparel and digital merchandise such as virtual goods and NFTs are expected to make up for physical music’s decline and lift total merch revenues.

Merch isn’t the most financially appealing part of the music business. That would be digital music, which enjoys both higher margins and higher growth rates. In, Universal Music Group’s recorded music business had earnings before interest, taxes, depreciation and amortization margin of 25.4%, nearly five times its merch division’s 5.3% EBITDA margin. And while MIDiA expects merch to grow at a 2.8% CAGR through 2030, Goldman Sachs forecasts the global music streaming market will grow at a 9.

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