Advancements in technology over the past two decades have fostered growth for new industries. One of which is the music streaming industry, which disrupted and forever changed the music industry as we once knew it. The days of vinyl and CDs have been replaced by streaming platforms, which enable users to have thousands of songs at their fingertips.
Not only has the shift towards music streaming changed the way we listen to music, but also the way the music industry makes money. The majority of revenue now comes from streaming music, and only a handful of companies dominate this market.
The International Federation of the Phonographic Industry (IFPI) releases global music reports on an annual basis. The 2019 report indicated that streaming, including subscription audio streams and ad-supported streams, accounted for 56.1% of global recorded music revenues. This percentage represents $11.4 billion, a 22.9% increase from 2018.
Leaders in music streaming
While there are many free music streaming options, we are zooming in on platforms with paid subscriptions. Tencent Music, which includes QQ Music, Kuwo and Kugou, led the pack in terms of monthly active users (MUAs), however, in terms of paid subscriptions, Spotify led with a 34% share. Below are the platforms with the biggest market share in Q2 2020:
Investing via DEGIRO
Would you like to invest in on the of the companies mentioned in this article? Each music platform or its parent company can be traded via our platform:
- Spotify (LU1778762911) is available on the New York Stock Exchange (NYSE), Xetra and Börse Frankfurt.
- Apple Music is, of course, owned by Apple (US0378331005) and you can trade it on the Nasdaq, Xetra and Börse Frankfurt.
- Amazon, owner of Amazon Music, is also offered on the Nasdaq, Xetra and Börse Frankfurt.
- Tencent Music (US88034P1093) trades on the New York Stock Exchange.
- YouTube is owned by Google parent Alphabet, which offers Class A shares (US02079K3059) and Class C shares (US02079K1079). Both the Class A shares and the Class C shares can be traded on the Nasdaq, Xetra and Börse Frankfurt.
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The information in this article is not written for advisory purposes, nor does it intend to recommend any investments. Please be aware that facts may have changed since the article was originally written. Investing involves risks. You can lose (a part of) your deposit. We advise you to only invest in financial products that match your knowledge and experience.
Sources: Counterpoint Research, IFPI, Grand View Research