From Playlists to Portfolios: Investing in Music’s Future

Some Key Characteristics

The music industry has consistently proven to be resilient, even in challenging economic environments. It is largely recession-proof, unaffected by tariffs, and can serve as a hedge against inflation—making it an oasis of stability in a volatile macro landscape.

Digital music, as a non-physical good, bypasses the impact of trade restrictions and supply chain disruptions. Major players like UMG, WMG, and Spotify generate the bulk of their revenue from subscription-based streaming services, which historically experience minimal churn—even during economic downturns.

Despite ongoing macroeconomic turbulence, the fundamentals of the music industry remain strong. In fact, consumer spending on music is still only about half of what it was in the 1990s, suggesting significant room for growth.

Compared to other subscription-based services, music remains relatively inexpensive and undervalued. Moreover, people maintain deep, personal connections to music—often turning to it for comfort and stability during stressful times.

Source: musicbusinessworldwide.com

The global music industry is projected to reach $163 billion by 2030, driven by strong and consistent growth trends.

Global recorded music revenues are growing at a 9% compound annual growth rate (CAGR), while paid streaming penetration is expanding even faster—at 19% annually.

These trends reflect both the increasing global demand for music and the growing monetization of digital platforms.

Source: goldmansachs.com

Investors are increasingly focused on areas like streaming, content and distribution, live music events and ticketing, equipment and technology, and performance rights. Today, there are a variety of ways to gain exposure to the asset class—including royalty funds, private equity, and exchange-traded funds.

This commentary is provided by the David Schulhof, Founder & CEO of MUSQ. For investors seeking targeted exposure in this space, consider exploring the MUSQ Global Music Industry Index ETF (MUSQ), which seeks to provide focused exposure to the entire music ecosystem and track companies with a core business interest in the global music industry.

Disclaimer

Please note that this article reflects the author's personal views and does not represent the opinions of the publication or its affiliates. It is for informational purposes only and does not constitute investment advice. It is essential to seek guidance from a registered financial professional before making any investment decisions.