In this article, we discuss the 15 most valuable music companies in the world. You can skip our comprehensive analysis of the music industry, and go directly to 15 Most Valuable Music Companies in the World.
Music Industry: An Analysis
The music industry is set to grow on the back of several growth catalysts as millions of young people, especially from Generation Alpha and Generation C, are expected to start using the internet over the coming years and sign up for music streaming services like Spotify, YouTube Music, Pandora, SoundCloud, iHeartRadio, and Apple Music. Goldman Sachs recently outlined its bullish thesis for the music industry and increased its estimates for the industry by 7% for 2022, by 5% for 2023, and by 10% for 2030. Goldman Sachs’ estimates are for various aspects of the music industry, including recorded music, publishing and live music.
According to another industry report, the global music streaming market is expected to reach $103.07 billion by 2030, growing at a CAGR of 14.7% from 2022 to 2030.
Due to the popularity of what this industry provides, it reeled in $23.1 billion in 2020 which was 7% more than its revenue in 2019. This is also the only industry in the world which experienced growth for the quarter of a century, starting from 1999. Approximately one billion records were sold worldwide in 1974 and by the end of the century, the figure had jumped three times higher.
At the end of the nineties, pirating became rampant which left many record labels and artists struggling to stay afloat. Record labels saw a decline of 40% as piracy strengthened its control. Fast forward 15 years, while piracy has been tackled, digital streaming disrupted the industry’s growth. The seeds of the digital streaming revolution were sown by iTunes. In 2016, more than 112 million paying subscribers had joined Spotify and iTunes Music. Many years later as the industry soars to new heights again, it appears the convenience and personalization of music streaming and the accessibility created by smart devices have driven the global music industry’s growth.
Most Valuable Music Companies in the World
15. United Masters (Private)
Estimated Valuation: $550 million
UnitedMasters is Interscope Records’ former president Steve Stoute’s start-up. The company is offering to give musicians an alternative to record labels. Artists only have to pay UnitedMasters a competitive rate which then distributes their music across the internet with all the music platforms.
14. Believe Société anonyme (EPA:BLV.PA)
Market Cap: $2 billion
Believe is headquartered in Paris, France, and is a record label and music distributor. It operates more than 20 brands and Merch labels like Believe Distribution Services, AllPoints, Naïve, and Nuclear Blast. The company is engaged in a range of digital music services and video streaming as well as a network of physical distribution partners.
13. BMG Rights Management (Private)
Estimated Valuation: $2.1 billion
BMG Rights Management is owned by the German conglomerate, Bertelsmann. The company is a combined label and publisher that has made its name amongst the biggest record labels in the world. BMG Rights Management also has over 15 branches on four continents and has released albums with names like Blink-182, Avril Lavigne and Nickelback.
12. iHeartMedia, Inc. (NASDAQ:IHRT)
Market Cap: $968 billion
iHeartMedia, Inc. (NASDAQ:IHRT) has a quarter of a billion monthly users, making it the biggest operator of broadcast radio stations in the U.S. It completed 2020 with 244 AM stations and 614 FM stations with a revenue of $2.95 billion in the same year. iHeartMedia, Inc. (NASDAQ:IHRT) also owns IHeartRadio — a digital audio streaming service that provides access to both streaming music and the digital feeds of radio stations.
11. Sonos, Inc. (NASDAQ:SONO)
Market Cap: $2.48 billion
Sonos, Inc. (NASDAQ:SONO) is readily known as the inventor of multi-room wireless audio products. The wireless speaker maker is one of the biggest companies of its kind in the industry with over 100 streaming partners like Apple Music, Pandora, and Spotify. By the end of 2020, Sonos, Inc. (NASDAQ:SONO) had 31.6 million products registered in 10.9 million households. Its annual revenue for 2020 was announced to be $1 billion, a 5.2% increase from 2019.
Sonos, Inc. (NASDAQ:SONO) also rolled out its ad-supported radio service with artist stations in 2020 for which it is targeting 500,000 subscribers.
10. Big Hit Music (Private)
Valuation: $5.6 billion
Big Hit Music is a familiar name if one follows K-pop music. It is a South Korean entertainment company that was established in 2005. Its parent company is Hybe Corporation and Big Hit itself is home to the biggest K-Pop band, BTS. Prior to it going public in 2020, its estimated valuation was reportedly $4.06 billion.
However, when it went public, Big Hit’s share price opened at $235 which was double its IPO price of $117 per share. This gave the company a day-one market cap of $7.6 billion. Its revenues also sky-rocketed to $249 million in the first half of 2020 alone through live-streamed concerts. Big Hit has also announced a partnership with Universal Music Group – the biggest in music history – to launch a new K-Pop band.
9. Tencent Music Entertainment Group (NYSE:TME)
Market Cap: $7.5 billion
Tencent Music Entertainment Group (NYSE:TME) is the biggest and most successful online music entertainment platform in China. It operates the country’s highly popular and innovative music apps such as QQ Music, Kugou Music, Kuwo Music and WeSing. Tencent Music Entertainment Group (NYSE:TME) is also called “the Spotify of China”. The company is owned by Tencent which operates WeChat in China. As a result, Tencent Music has access to WeChat’s 1 billion monthly active users.
8. Live Nation Entertainment, Inc. (NYSE:LYV)
Market Cap: $18.7 billion
Live Nation Entertainment, Inc. (NYSE:LYV) is the biggest concert promoter, venue operator and artist manager in the music industry. Its merger with TicketMaster, the largest ticket provider in the music industry, has given the company a monopoly over concert tickets.
7. Warner Music Group Corp. (NASDAQ:WMG)
Market Cap: $13 billion
Warner Music Group Corp. (NASDAQ:WMG) is one of the most popular names in the music industry. It earns its heavy profits mainly from recorded music and it also generates revenue from music publishing. Warner Music Group Corp. (NASDAQ:WMG) also owns other labels like Warner Records, Atlantic Records, Asylum, and Elektra. Most of these labels have also backed up stars like Ed Sheeran and Bruno Mars.
The company generated an annual revenue of $4.46 billion in 2020, slightly up from $4.44 billion in FY 2019. Since it earns heavily from recorded music, the pandemic’s consequences such as reduced physical gatherings and services affected its revenue although it was saved by a close margin.
6. Sirius XM Holdings Inc. (NASDAQ:SIRI)
Market Cap: $24 billion
Sirius XM Holdings Inc. (NASDAQ:SIRI) provides a range of audio entertainment including but not limited to music. The company stands out and mostly retains its profits because it depends on satellites to transmit its music. As a result, SiriusXM is the only company that can provide excellent service where internet-based apps can not. Sirius XM Holdings Inc. (NASDAQ:SIRI) is also used mostly inside vehicles which is why it’s not going to decline any time soon.
The company attracted 34.7 million subscribers in 2020 alone which generated annual revenue of $6.35 billion. In 2019, SiriusXM acquired Pandora Media in a $3.5 billion deal. Since then, Sirius XM Holdings Inc. (NASDAQ:SIRI) has tapped into Pandora Media’s advertising strengths resulting in greater revenues.
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Disclosure: None. 15 Most Valuable Music Companies in the World is originally published on Insider Monkey.