The economic potential of music industry

Faaiz Gilani & Shanzay Awan
April 5, 2026

Government-backed creative hubs could provide the kind of institutional foundation that South Korea built deliberately

The economic potential of music industry


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very Sunday night, somewhere in Karachi, a small ceremony takes place. Someone steps forward and performs a song written and composed by them. The footage, shot on phone cameras, is posted on an Instagram page called Qalam Karachi 786.

Music has always been close to the people’s hearts. The stardom of Noor Jehan, Mehdi Hassan, Nusrat Fateh Ali Khan, Nazia Hassan and Atif Aslam is proof that even as times change, musicians continue to be celebrated. What has changed in recent years is the genre leading that celebration. Rap and hip-hop have become the most consumed music in Pakistan.

Pakistani hip-hop has operated on a single rule: build it yourself. The hip-hop artists have demonstrated a stubborn faith: if you keep showing up, recording and posting, some of your work will eventually get noticed. There’s something deeply Pakistani about that: resilience and the hope that it works out. But a culture does not sustain itself on faith alone. The artists who built this scene from nothing deserve more than polite applause. Their efforts deserve real attention.

Real attention isn’t about standing and clapping. We should be looking honestly at the economic opportunity in this. The data, particularly from Spotify, makes a clear case. Hip-hop is no longer a subcultural niche in Pakistan. It is the main driver of the country’s digital music economy. Annual consumption of Pakistani hip-hop is outpacing traditional genres. The genre now accounts for 60 percent of the top 30 international tracks on the 2024 Global Impact List.

The emergence of rap in Pakistan is a genuine cultural shift. It has caught on fast, particularly among young people. What makes it distinctly Pakistani is the fusion: local languages, traditional musical textures and street vocabulary layered onto a global form. Modern rappers aren’t imitating anything. Instead, they are building something indigenous, with gully rap drawing on the languages, slang and rhythms of the artists’ neighbourhoods.

Spotify launched in Pakistan in February 2021. It revealed that the music scene was already transforming. Local hip-hop streams have grown 245 percent since 2022. Producer Umair’s individual streams have grown by 1,200 percent in the same window. In 2024, Talha Anjum displaced Atif Aslam, synonymous with mainstream Pakistani music for nearly two decades, as the platform’s most-streamed Pakistani artist. In 2025, the top three spots on Spotify belonged to Talha Anjum, Umair and Hasan Raheem: a rapper, a producer and a hip-hop artist. Charts are rarely wrong about where culture is headed.

Despite being labelled K-pop, the group’s musical DNA is rooted in hip-hop. Three of its seven members are rappers. The group’s discography draws heavily on hip-hop. One of the most commercially successful acts in modern music history is, at its core, a hip-hop group. BTS alone is estimated to contribute $4.9 billion annually to the South Korean economy.

A model worth taking seriously is the Resident Performer format. Rather than large one-off events, artists perform regular scheduled shows at a single venue over weeks or months, sometimes years. The model has been globally adopted since the 1940s. 

This didn’t happen by accident. South Korea made a deliberate, long-term bet on its cultural industries. Policy frameworks funded music production infrastructure, supported artists internationally and positioned Korean pop culture as a vehicle for soft power. The government helped turn a local art scene into a global export. The key takeaways here is about the relationship between policy and potential. Genres don’t scale into economic forces on their own. They need investment, infrastructure and institutional recognition.

Pakistan has a music fraternity but not yet an industry. There is abundant talent on the streets but no formal architecture. Building that requires three things. The first of those is digital infrastructure. Platforms like Spotify, through their playlists, such as A.S.L.I., have connected Pakistani artists to international listeners. But the digital divide in rural areas makes for a low ceiling. Streaming penetration remains uneven across the country. Until that changes, music’s contribution to the GDPwill stay well below its potential.

The second is brand and corporate investment. Platforms like Pepsi Battle of the Bands and Coke Studio have historically given artists visibility they couldn’t have found otherwise. Some people worry that such partnerships impose a commercial lens on experimental creativity. That’s a fair concern. But they’ve also funded talent that would otherwise have had no platform. Corporate investment, done well, can help a creative industry grow without swallowing it.

The third is live performance. Festivals and live events carry high potential but also huge overheads. The economics often push organisers away from running them at scale. This limits the live revenue artists can generate.

A model worth taking seriously here is the Resident Performer format. Rather than large one-off events, artists perform regular scheduled shows at a single venue over weeks or months, even years. The model has been globally adopted since the 1940s. Liberace and Frank Sinatra were among its early advocates. Las Vegas made it an institution. It produces a loyal, returning audience and a consistent revenue stream that doesn’t depend on pulling off a massive event every time. For venues, it means stable income and long-range booking certainty. For artists, it means sustained exposure without volatility.

But the longer game requires government participation. Reducing import duties on production hardware and musical instruments can be a practical starting point.

Government-backed creative hubs can provide the kind of institutional foundation that South Korea built over decades and Pakistan has never offered its artists. Music and technical knowledge also need to find their way into education. The skills gap is real. Closing it is how a fraternity can become a structured industry. Watching students from Zindagi Trust perform on stage, raises hope that music belongs in classrooms and that the returns are both economic and human. The talent has never been the question.


The writer is an assistant consultant for climate policy and finance at Oxford Policy Management

Shanzay Awan is a UC Berkeley alumnus, working in the development sector, specialising in social protection

The economic potential of music industry