Spotify Takes the Music Industry Market Cap Crown

A new analysis from Omdia has revealed that Spotify overtook Universal Music Group (UMG) to become the biggest music industry company in market capitalization terms in the second quarter of 2024. Spotify’s market cap at the end of June stood at $62.5 billion compared with $53.7 billion for UMG. Spotify’s market cap increased 18.2% from $52.8 billion at the end of the first quarter, while UMG’s edged down 1.5% from $54.5 billion.

In a strong quarter for music streaming services, China’s Tencent Music Entertainment (TME) was third in the rankings. Its market cap surged 26.3% to $24.1 billion from $19.1 billion. As a result, Spotify’s share of the combined market cap of the 28 publicly listed music companies rose to 28.7% from 24.9%. UMG’s share decreased, to 24.7% from 25.7%, while TME’s share was up, to 11.1% from 9%.

Of the 28 tracked companies, just eight registered an increase in their share prices over the quarter. One (Mdundo) saw no change and the other 19 recorded a negative performance. The Indian music company Saregama was the top performer. Its share price opened on April 1 at INR348.05 ($4.18) and closed on June 28 at INR555.45. The company’s market cap in the quarter increased, to $1.28 billion from $878 million. At the other end of the scale, Brazilian live music promoter suffered the biggest decline, with its share price tumbling 50.7%, to BRL1.47 ($0.29) from BRL2.98.

The combined market cap of the 28 companies ended June at $217.5 billion, compared with $212.4 billion at the start of April and $194.2 billion at the beginning of the year. Of the total, US-listed companies accounted for 63.3% of the combined end-June market cap total, with Netherlands-listed companies generating 24.7%, and South Korean companies 4.3%. The market cap share for streaming services stood at 41.2%, with record companies/music publishers accounting for 38.8%.

“Spotify’s impressive second quarter performance is a continuation of its success from the first quarter of this year,” said Simon Dyson, Senior Principal Analyst at Omdia. “The share price has risen almost 70% so far this year and has doubled since last October.”