Spotify Increases Share in the Music Industry

According to an analysis by Omdia, Spotify has increased its market share of the leading music companies’ combined market capitalization in the third quarter of this year. After overtaking Universal Music Group (UMG) to become the biggest music industry company in the second quarter, Spotify’s market share of the 28 companies tracked ended September at 32.9%, up from 28.7% at the end of June.

Spotify’s market cap over the three months increased, to $72.2 billion from $62.5 billion. UMG remained in second place, but the company’s market share was down, to 21.8% from 24.7%. In a strong quarter for live music promoters, Live Nation took third spot in the rankings. Its market cap ended the quarter at $25.4 billion compared with $21.7 billion at the end of June, boosting its market share to 11.6% from 10%. Chinese music streaming service Tencent Music Entertainment slipped to fourth place with a market share of 8.7%. Rounding out the top five, WMG’s market cap share edged up, to 7.4% from 7.3%.

In a good quarter for music overall, 15 of the 28 tracked companies registered an increase in their share prices over the quarter with 13 recording a negative performance. US broadcast group iHeartMedia was the top performer. Its share price opened on July 1 at $1.09 and closed on September 30 at $1.85. The company’s market cap in the quarter increased, to $289 million from $196 million. At the other end of the scale, US music and entertainment service LiveOne suffered the biggest decline, with its share price dropping 38.4%, to $0.95 from $1.54.

The combined market cap of the 28 companies ended September at $219.6 billion compared with $217.5 billion at the start of July and $194.2 billion at the beginning of the year. Of the total, US-listed companies accounted for 65.6% of the combined end-September market cap total, with Netherlands-listed companies generating 21.8%, and German-listed companies 4.6%. The market cap share for streaming services stood at 43.4%, with record companies/music publishers accounting for 35.4%.

“Spotify’s performance in the third quarter is a continuation of the company’s strong showing in quarters one and two,” said Simon Dyson, Senior Principal Analyst at Omdia. So far this year the share price has almost doubled. In contrast, UMG’s share price has struggled to regain the losses following the release of the company’s midyear results.”