Is Music a Growth Play?
Those aiming to invest in high-growth areas may want to consider exploring the global music industry. Forecasts indicate significant growth potential in music over the coming years.
Investors looking to invest in fast-growing segments of the economy may want to consider the global music industry. Music is expected to grow at a fast rate through the decade. What is driving this growth? How can individuals invest in the global music industry?
Strong Growth in 2022
The global music industry experienced record revenues of $26.2 billion in 2022, representing a 9% increase over 2021.[1]
The share of streaming increased from 65.5% to 67% of music revenue during 2022. In fact, all of the major segments of the music industry experienced growth in 2022, with the exception of Downloads and Other Digital.
Continued Expected Growth
The global music market is expected to grow by $50.46 billion from 2022-2026, representing a compound annual growth rate (CAGR) of 11.8%.[2] A CAGR of 7.3% is expected through 2030.[3]
Global paid streaming penetration is expected to double by 2030
Streaming subscribers are expected to increase at a double-digit growth rate over the next few years. Just as important, paid streaming revenue is projected to grow at a 10% CAGR through 2030.[4] This will likely be driven by both the expected increase in subscribers as well as estimates price increases of 2-3%.
Music publishing revenue is expected to grow at a 6% CAGR to reach $11.7 billion by 20303
As streaming services increase prices, royalties to artists are expected to grow as well. Through 2027, artists will receive royalties of more than 15% of revenues.
Global live music rebounded 85% YOY in 2022 and surpassed pre-pandemic levels
Conservative estimates place global live music growth at a 4% CAGR through 2030.[3] However, Allied Market Research estimates a 9.7% CAGR from 2022 to 2031.[4]
Considering MUSQ for Focused Exposure to 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.
[1] Global Music Report 2023, IFPI, 2023
[2] Global Music Market 2022-2026, Research and Markets website, Retrieved 6/1/23
[3] Kerven, Daniel. Music Outlook 2023, Fundamental View, Themes for 2023 and a Modest UMG Upgrade to Start The Year, J.P. Morgan Equity Research, January 18, 2023.
[4] IFPI, Yang, Lisa, et al, Music in the Air, Goldman Sachs Equity Research, June 28, 2023
[5] Music Event Market Expected to Reach $482.4 Billion by 2031, Allied Market Research, 2022
MUSQ Global Music Industry 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).
Risk Disclosures
There is no guarantee the Fund will achieve its stated objectives.
In addition to the normal risks associated with investing, international investments may involve the risk of capital loss from unfavorable fluctuation in currency values, differences in generally accepted accounting principles or social, economic or political instability in other nations.
Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume.
In addition to the normal risks associated with investing, investments in small- or mid-capitalization companies typically exhibit higher volatility.
The Fund’s concentration in an industry or sector can increase the impact of, and potential losses associated with, the risks from investing in those industries/sectors.
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The Fund is new and has a limited operating history for investors to evaluate. A new and smaller fund may not attract sufficient assets to achieve investment and trading efficiencies.
The Fund may invest in securities denominated in foreign currencies. Because the Fund's NAV is determined in U.S. dollars, the Fund's NAV could decline if currencies of the underlying securities depreciate against the U.S. dollar or if there are delays or limits on repatriation of such currencies. Currency exchange rates can be very volatile and can change quickly and unpredictably.
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