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Tune into 3 ETFs to Tap the Thriving Global Music Industry
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In recent years, the global music industry has transformed into a thriving market. Revenues hit an extraordinary $26.2 billion in 2022, marking a 9% year-on-year growth – a tempo set to continue, according to industry forecasts. This surge can be credited to the immense growth in streaming services, with platforms like Spotify, Apple Music, and Amazon Music leading the symphony.
The share of streaming increased from 65.5% to 67% of music revenue during 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. While other avenues of revenues are concerned, for artists, performance rights revenue grew 8.6% in 2022, went back to pre-pandemic levels, whilst income from sync grew by 22.3%.
Inside the Melodious Notes of Global Music Industry’s Future
The U.S., 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, offering diverse investment avenues.
Emerging markets offer another lucrative investment opportunity. Countries like India, China, and Brazil have been witnessing a surge in demand for music content, providing potential for lucrative returns. Global paid streaming penetration is expected to double by 2030.
Paid streaming revenue is projected to grow at a 10% CAGR through 2030. Music publishing revenue is expected to grow at a 6% CAGR to reach $11.7 billion by 2030. Global live music bounce back 85% year over yar in 2022 and topped pre-pandemic levels. Global live music is expected to have increased at a 4% CAGR through 2022, per the investment case offered by MUSQ Global Music Industry ETF (MUSQ - Free Report) .
Key Players and Investment Opportunities
Companies like Universal Music Group (UMG), Warner Music Group (WMG), and Sony Music Entertainment (SME) 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 Corporation, respectively – can be a robust strategy.
How Profitable The Streaming and Tech Industries Are
The rise of music streaming has transformed the industry. As of 2022, Spotify (SPOT) had more than 345 million active users. Other tech giants have also entered the scene, with Apple Music (AAPL) and Amazon Music (AMZN) 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 (LYV), music publishing entities like UMG and WMG and, and music tech startups are also witnessing commendable growth.
ETFs to Tap this High-Beat Area
The Clouty Tune ETF
The fund looks to track the performance of the Solactive Clouty Tune index. The Index was developed in 2023 by Clouty, Inc. and is administered by Solactive AG. The ETF offers investors exposure to the growth potential of these sectors by focusing on companies engaged in music production, broadcasting, streaming platforms, event management, content creation, and more.
No stock accounts for more than 2.79% of the fund. Liberty Media, New York Times and Naspers hold top three spots in the fund. The fund charges 65 bps in fees.
The underlying MUSQ Global Music Industry Index seeks to offer exposure to global, exchange-listed companies, exchange traded funds and royalty trusts - all with a core business interest in the global music industry. The fund has high company-specific concentration risks. Amazon (7.84%), Apple (7.68%) and Alphabet (GOOGL) (7.53%) hold the top three spots in the fund. The fund charges 78 bps in fees.
The underlying KPOP Index is a 30-stock equity index that provides focused exposure to the Korea Exchange-listed companies engaged in the entertainment industry and the interactive media & services industry. Kakao Corp (10.95%), Naver Corp (10.82%) and Hybe Ord (10.11%) hold the top three spots in the fund. The fund charges 75 bps in fees.
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Tune into 3 ETFs to Tap the Thriving Global Music Industry
In recent years, the global music industry has transformed into a thriving market. Revenues hit an extraordinary $26.2 billion in 2022, marking a 9% year-on-year growth – a tempo set to continue, according to industry forecasts. This surge can be credited to the immense growth in streaming services, with platforms like Spotify, Apple Music, and Amazon Music leading the symphony.
The share of streaming increased from 65.5% to 67% of music revenue during 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. While other avenues of revenues are concerned, for artists, performance rights revenue grew 8.6% in 2022, went back to pre-pandemic levels, whilst income from sync grew by 22.3%.
Inside the Melodious Notes of Global Music Industry’s Future
The U.S., 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, offering diverse investment avenues.
Emerging markets offer another lucrative investment opportunity. Countries like India, China, and Brazil have been witnessing a surge in demand for music content, providing potential for lucrative returns. Global paid streaming penetration is expected to double by 2030.
Paid streaming revenue is projected to grow at a 10% CAGR through 2030. Music publishing revenue is expected to grow at a 6% CAGR to reach $11.7 billion by 2030. Global live music bounce back 85% year over yar in 2022 and topped pre-pandemic levels. Global live music is expected to have increased at a 4% CAGR through 2022, per the investment case offered by MUSQ Global Music Industry ETF (MUSQ - Free Report) .
Key Players and Investment Opportunities
Companies like Universal Music Group (UMG), Warner Music Group (WMG), and Sony Music Entertainment (SME) 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 Corporation, respectively – can be a robust strategy.
How Profitable The Streaming and Tech Industries Are
The rise of music streaming has transformed the industry. As of 2022, Spotify (SPOT) had more than 345 million active users. Other tech giants have also entered the scene, with Apple Music (AAPL) and Amazon Music (AMZN) 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 (LYV), music publishing entities like UMG and WMG and, and music tech startups are also witnessing commendable growth.
ETFs to Tap this High-Beat Area
The Clouty Tune ETF
The fund looks to track the performance of the Solactive Clouty Tune index. The Index was developed in 2023 by Clouty, Inc. and is administered by Solactive AG. The ETF offers investors exposure to the growth potential of these sectors by focusing on companies engaged in music production, broadcasting, streaming platforms, event management, content creation, and more.
No stock accounts for more than 2.79% of the fund. Liberty Media, New York Times and Naspers hold top three spots in the fund. The fund charges 65 bps in fees.
MUSQ Global Music Industry ETF (MUSQ - Free Report)
The underlying MUSQ Global Music Industry Index seeks to offer exposure to global, exchange-listed companies, exchange traded funds and royalty trusts - all with a core business interest in the global music industry. The fund has high company-specific concentration risks. Amazon (7.84%), Apple (7.68%) and Alphabet (GOOGL) (7.53%) hold the top three spots in the fund. The fund charges 78 bps in fees.
KPOP & Korean Entertainment ETF (KPOP - Free Report)
The underlying KPOP Index is a 30-stock equity index that provides focused exposure to the Korea Exchange-listed companies engaged in the entertainment industry and the interactive media & services industry. Kakao Corp (10.95%), Naver Corp (10.82%) and Hybe Ord (10.11%) hold the top three spots in the fund. The fund charges 75 bps in fees.