In recent years, the global music industry has transformed into a thriving market. Revenues hit an extraordinary $26.2 billion in 2022, marking 9% year-over-year growth. This tempo is likely to continue, according to industry forecasts. The surge can be credited to the immense growth in streaming services, with platforms like Spotify, Apple Music and Amazon Music leading the symphony.
Key Players and Investment Opportunities
Companies like Universal Music Group (UMG), Warner Music Group (WMG) and Sony Music Entertainment rule the global recorded music industry. UMG alone made up 30% of the market in 2022. Investing in these market leaders or their parent companies — Vivendi, Access Industries, and Sony Corp. — can be a robust strategy.
The rise of music streaming has transformed the industry. As of 2022, Spotify had more than 345 million active users. Other tech giants have also entered the space, with Apple Music and Amazon Music holding significant market shares. Investing in these tech companies can offer exposure to the thriving music industry.
Plus, supplementary sectors like concert and tour promotion companies like Live Nation, music publishing entities like UMG and WMG and music tech startups are also witnessing commendable growth.
Upbeat Outlook for Global Music Industry
The share of streaming increased from 65.5% to 67% of music revenues in 2022. Subscription audio streams and ad-supported streams made up 48.3% and 18.7% share of music revenues, respectively. Performance rights accounted for 9.4% of the share. Performance rights revenues grew 8.6% in 2022, going back to the pre-pandemic levels, while income from sync grew 22.3%.
The United States, being the largest music market globally, plays a crucial role. Key drivers of this growth include the popularity of digital streaming and the resurgence of vinyl records and other physical formats.
Emerging markets offer another lucrative investment opportunity. Countries like India, China and Brazil have been witnessing a surge in demand for music content, promising lucrative returns. Global paid streaming penetration is expected to double by 2030.
Paid streaming revenues are projected to see a 10% CAGR through 2030. Music publishing revenues are expected to witness a 6% CAGR to reach $11.7 billion by 2030. Global live music bounced back 85% year over year in 2022 and topped the pre-pandemic levels. Global live music is expected to have witnessed a 4% CAGR through 2022, per the investment case offered by MUSQ Global Music Industry ETF.
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