First Quarter 2024 Earnings Highlight Music’s Continued Growth
Major global music companies, Spotify, Live Nation, and Universal Music Group, report robust Q1 2024 earnings signaling potential continued industry growth. Explore an emerging investment opportunity with the MUSQ Global Music Industry ETF.
Many large global music companies reported strong first-quarter 2024 earnings, highlighting the industry’s strong growth has continued into 2024. We highlight three companies that may serve as a bellwether for the global music industry.
Spotify’s Earnings Highlights Streaming Growth
Spotify reported total active monthly users grew 19% in the first quarter of 2024 compared to the first quarter of 2023.[1] Premium, or paying, subscribers grew 14%. The company’s revenue grew 20%, aided by an increase in paying subscribers and recent price increases.
The company’s focus on improving profitability is reaping results as the company’s gross profit increased by 31% boosting its gross margin to 27.6% from 25.2%. The company swung to an operating profit of $168 million from an operating loss of $156 million.[2]
Why It’s Important
Streaming is the dominant means by which individuals consume music. Spotify’s results indicate continued growth in the streaming industry.
Live Nation’s Earnings Shows Strength of Live Performances
Live Nation reported that revenue grew 21% in the first quarter of 2024 compared to the first quarter of 2023. Its results point to the potential for another record year for live music.
The company indicated that ticket sales are up double-digits compared to last year. Over 85% of its 2024 shows at large venues are booked compared to 75% this time last year. Over 77 million fee-bearing tickets were sold in the first quarter, and through mid-April, over 112 million.
Attendance at arena shows was up 40%, and fan growth was up 21% to 23 million. Sponsorship revenue was up 24%, the company’s highest first quarter ever.[3]
Why It’s Important
Live Nation is one of the largest live event companies in the world. Its first-quarter earnings showed that live performances continued to grow in 2024 and that 2023’s results may not have been just a one-time jump in comparison to the COVID-induced slump.
Universal Music Group Points to Growth in Recorded Music
Universal Music Group’s revenue grew 5.8% in the first quarter of 2024 compared to the first quarter of 2023. On a constant currency basis, revenue grew 7.9%.
Revenues grew 3.4% in its recorded music segment and streaming revenue grew over 10%. Music publishing grew 16.7%, led by a 26.7% gain in performance revenue. Merchandising revenue grew 6.5%.
Universal’s performers include Taylor Swift, Morgan Wallen, Ariana Grande, and Olivia Rodrigo.[4]
Why It’s Important
Universal’s business includes major segments of music recording and publishing and helps to illustrate that individuals continue to consume recorded music.
Strong Growth Across the Global Music Industry
Taken together, the results of these three companies highlight continued strength in the major segments of the global music industry, namely, streaming, live performances, and music recording and publishing.
How May Individuals Gain Exposure to Companies in the Global Music Industry?
The MUSQ Global Music Industry ETF (MUSQ)
The MUSQ Global Music Industry ETF (MUSQ) seeks to provide investment results that, before fees and expenses, correspond to the total return performance of the MUSQ Global Music Industry Index (MUSQIX). The MUSQIX Index is designed to provide exposure to global, publicly traded companies and royalty funds with a core business interest in the global music industry.
MUSQ may provide individuals with an attractive vehicle to gain exposure to the global music industry.
For a complete list of MUSQ holdings, please click here. Holdings subject to change.
[1] Note that all comparisons are Q1 2024 versus Q1 2023
[2] Q1 2024 Update, Spotify, 4/23/24
[3] Live Nation Entertainment Reports First Quarter 2024 Results, Live Nation Earnings Release, 5/3/24
[4] Universal Music Group N.V. Reports Financial Results for the First Quarter Ended March 31, 2024, Universal Music Group, 5/2/24
MUSQ Global Music Industry Index ETF is offered by prospectus. Carefully consider the investment objectives, risks, charges, and expenses. This and other important information can be found in the MUSQ ETF prospectus, which should be read carefully before investing and can be obtained by visiting https://musqetf.com or by calling 1-855- MUSQ-ETF(687-7383).
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