Sound
The audio and entertainment industry has seen several disruptions over time. The question is which companies will be left standing when the music stops.
Music is one of the longest-standing industries in the world, but it’s in constant evolution. Its biggest disrupter is arguably Spotify ($SPOT), the $58b audio streaming service that finished what Napster started, and clocked its largest ever gross profit of $1b last quarter. It seems like no matter how tight the economy gets, people won’t give up listening to freshly curated playlists, or a podcast on ‘How To Pay Bills With Money You Don't Have’ on their way home from work.
As streaming services like Spotify became the new normal, record label conglomerates like Warner Music Group ($WMG) were forced to tango. Now Spotify relies on licensing deals with Warner to keep its service running, and in turn, Warner makes a big chunk of its revenue (18% of last year’s total) from Spotify.
The most established player in the music publishing space is Sony ($SONY). Its revenue related to recorded music grew 23% YoY in 2023, to $7.39b, but streaming services accounted for 66% of that amount. Good enough that the firm has decided to cut loose its lower-performing financial services division come October 2025.
The age of the internet has changed the hardware too. Sonos ($SONO) offers a sound system that uses Wi-Fi to stream music from over 100 streaming services through interconnected speakers that audiophiles love. The company is relatively new to the Nasdaq, and was forced to downsize when COVID hit it hard. But right now the bigger concern for investors is likely its updated privacy policy, which no longer features the line ‘Sonos does not and will not sell personal information about our customers.’
It’s been easier for some companies in a post-COVID economy. People really (really) missed going out to see bands and dance, so concert attendance jumped to an all-time high of 143 million in 2023. That’s according to Live Nation Entertainment ($LYV), the behemoth that owns Ticketmaster.
It’s in that environment that an artist like Taylor Swift can be said to prop up the economy, her fans even causing a literal earthquake at one of the Eras Tour concerts. The tour generated $1b in ticket sales, with a mere $12.9m staying with Ticketmaster from selling tickets to 47 of those shows. This figure could have been 24% higher if Swift hadn’t barred the firm from selling on the secondary market.
It may seem like streaming services and entertainment platforms have the biggest say in how music is consumed and monetised today. But if recent history tells us anything, another disrupter could be waiting in the wings to have the industry singing to its tune.
