Are there music stocks to trade? Since the beginning of time, the music industry has grown and evolved. We listened to it on the radio, cassettes, or CD players a few decades ago. When MP3 players came out, new possibilities were unlocked. Who doesn’t remember using LimeWire or an MP3 converter to download tracks? Platforms had to innovate and change their business model to limit music pirating.
Chart by TradingView
Table of Contents
How to Invest in Music Stocks
Today, dozens of companies are competing to gain listeners. However, it’s not only about music anymore.
Podcasts are also gaining much more attention over the last few years. So, what does that mean for music stocks?
Since most music companies have an app, we have them at our fingertips. Which means their brand recognition is off the charts.
Many platforms diversify their media portfolios to please as many consumers as possible. So which ones are doing the best job? Let’s find out.
Spotify ($SPOT) TipRanks Stock Forecast Report 3/24
1. Spotify (NYSE: SPOT)
We began our music stocks with a Swedish company that revolutionized the music industry. In 2011, Spotify launched in the US.
Since users benefitted from millions of tracks with no limits, oldies or contemporary, there was something for everyone.
Spotify offers a premium paid version and a free version. The free version is riddled with advertisements and provides the platform with an alternative source of revenue. The transition to mobile music greatly benefitted consumers and artists. Music pirating is practically nonexistent, and artists can be paid for their work.
Between 2010 and 2020, Spotify’s market share rose from 7% to 83% in the US. During this period, Apple’s monopoly with iTunes came to an end.
The platform is in the lead with 31% of the market share. Spotify’s innovations and platform were user-friendly, and iTunes was no longer a match. So, how can Spotify keep growing and outshine its competitors?
2. Apple (NASDAQ: AAPL)
Next on the music stocks list is Apple. The platform isn’t new to the music industry. For over a decade, users relied on iTunes to download files and listen to them on their iPods or MP3 players.
However, its relevance disappeared with Spotify’s new technology. It took Apple a few years to release Apple Music to be able to compete with Spotify.
Today, the platform is second among music streamers, with 15% of the global market share. However, Apple has one big advantage over Spotify. The company has millions of loyal iPhone customers who prefer Apple Music over Spotify.
Apple can certainly capitalize by offering reductions or other incentives to Apple users. Apple can also innovate in the same growth opportunities as I mentioned above. But they aren’t the only ones in this market.
3. Sirius XM (NASDAQ: SIRI)
It’s time to switch it up a bit again with music stocks. Sirius isn’t exactly a global music streaming platform. It only operates in the US, Puerto Rico, and Canada.
In 2019, Sirius acquired Pandora with hopes of competing in the music streaming industry. However, Pandora is very limited geographically.
The platform is only available in the US. So we established that Sirius doesn’t have an international footprint, but how is the company doing in the US?
Well, Sirius is the only satellite radio provider in the US. Unfortunately, the Internet isn’t always available on the road to stream our favorite albums on Spotify, Apple Music, or wherever else. Fortunately, the radio is available in those places.
This is where Sirius makes its bread and butter. However, since 2019, the number of active users has been dropping. As a result, it’s easier than ever to be connected in remote places of the world.
Radio listeners, hence, become more and more scarce. What about Pandora? Unfortunately, the streaming platform’s quality is nowhere near its competitors and has also been losing users yearly. What a waste of 3.5 Billion dollars.
Sirius is for those looking for some new music every once in a while, but it isn’t posing any threat to capturing any market share in the future. If anything, it’s an excellent target to acquire from one of the top companies.
Music Stocks Chart Example - SIRI
This is a daily chart of the music stock SIRI. The price is at the 50% retracement level. It’s currently at the peak of a rising wedge pattern, which might be due for a pullback. Preceding the rising wedge was a falling wedge pattern. There was a major spike in price to $7.95, but it ultimately turned into a head and shoulders pattern.
4. Google (NASDAQ: GOOGL)
Some readers may think that Google needs a music streaming platform. So you might be wondering why they’re included in our music stocks list.
For those unaware, Google owns YouTube, the largest video streaming platform. In recent years, YouTube has been developing its movies and music section.
Today, YouTube has 8% of the market share for music streaming. Good. There is always a free version with way too many ads. Those who succumb to the pressure and avoid ad-blockers must get the premium version.
It has the same features as all its competitors. Ads remain an incredible source of revenue for YouTube. It’s safe to say the platform has a monopoly on video streaming, and there aren’t any competitors.
COMPANY |  |  |  |
|---|---|---|---|
| DESCRIPTION | Trade Ideas provides powerful tools like real-time market scanning, AI-driven trade signals, customizable alerts, advanced charting capabilities, and time-saving data visualization | Barchart.com is the leading provider of real-time or delayed intraday stock and commodities charts and quotes. Track and analyze your investments and keep tabs on your portfolio | FinViz is an online stock screening, research, and visualization platform that offers various trading tools on a single platform. Solid scanner for traders or investors |
| HIGHLIGHTS | Trade smarter • Trade faster • Ease of use • Artificial intelligence • Real-time scanning • Customizable Trade Ideas > | Real-time quotes • Equities scanner • Ease of use • Track your investments • Analyze portfolio Barchart > | Stock screener • Powerful research tool • Heat map • Ease of use • Financial visualizations Finviz > |
5. Tencent Music Entertainment (NYSE: TME)
In this section, we will shift geographically. Although Tencent is listed on the NYSE, most of its listeners are in China. The app is available to download on all major platforms for anyone.
Tencent shouldn’t be underestimated. In 2021, the platform had over 790 million users and had a significant market share in China. In addition, it owns QQ Music, Kugou, Kuwo, and WeSing.
Tencent has 13% of the global market share, although mostly concentrated around its borders. Regardless, it is a profitable business.
The company owns a few labels to create and promote various music genres. Artists on these labels can stream their music on Apple and Spotify. I
t also has partnerships with other countries, notably South Korea, to create and distribute music. So, there is still a lot of growth left for Tencent Music.
Fun fact: Currently, Spotify owns almost 17% of TME’s Class A shares. Similarly, Tencent ranks third among Spotify’s top shareholders. So, what does the future hold for this partnership?
6. Warner Music Group (NASDAQ: WMG)
Last but not least is Warner Music Group. This company is in charge of producing, marketing and managing artists.
They include renowned artists such as Coldplay, Cardi B, Ed Sheeran, Dua Lipa, Gorillaz, and many more.
A variety of genres and the return of music festivals and concerts are sure to give Warner a boost in the upcoming quarters.
I included them because they are essential to the music industry. With them, artists would be able to find promoters or get famous. Unfortunately, not everyone can make a TikTok video or record a YouTube video and become famous thanks to someone who discovered it.
Warner is expected to keep growing. They are unlikely to start a streaming platform, but many of their artists are getting a lot of listens. In turn, Warner receives a portion of those as well.
Music Stocks Growth Opportunities
How do you combine a radio show and a music platform? Podcasts. How do they help music stocks? Since the pandemic, they have grown considerably. Artists found new ways to keep their audience locked in. Spotify is home to over 3.2M podcasts, which keeps increasing.
Furthermore, the platform keeps updating its footprint. In 2020, 85 countries were added to its list. This represents millions of potential subscribers. Those in poorer countries can use the platform for free but are subject to ads. Even premium members are sometimes subject to ads.
One of the most important entertainment segments is streaming. Spotify can continue growing by partnering with music venues and artists to stream concerts and festivals.
Users worldwide can be part of performance outside their borders. This can be for an extra fee. Users can gain access to a live performance, and artists can earn a percentage of the proceeds.
We’re not too far off from this kind of technology. However, every great idea brings competitors who wish to steal market share.
Swing Trade Watch List
Final Thoughts: How to Invest in Music Stocks
To conclude our post on music stocks, there are many ways to invest in the music industry. In the last decade, streaming platforms such as Spotify, Apple Music, and others revolutionized the music industry for artists and listeners.
It’s one industry that improved the world for all the parties concerned. As for the investing aspect, investors have a variety of choices. The big players have a growing international footprint.
Smaller local players can also license their products to the big players to make a buck. Finally, some are part of the artist’s team and made them a star. The industry has a bright future both live and on various supporting platforms. There is also a lot of innovation left.
If you want to learn more about profiting from the stock market, head to our free library of educational courses. We have something for everyone, including trading options for those with small accounts.
Frequently Asked Questions
- Spotify Technology S.A. (NYSE:SPOT)
- Sirius XM Holdings Inc. (NASDAQ:SIRI
- Warner Music Group Corp. (NASDAQ:WMG)
- NetEase, Inc. (NASDAQ:NTES)
Investors are not able to buy stock in a particular musician. However, they can invest in music stocks.
Spotify is a stock that trades under the symbol SPOT (NYSE).
