Spotify Dominated All Music Stocks in 2024, With Gains Nearly Tripling the Next-Best Company

When it came to music stocks in 2024, there was Spotify, and then there was everything else.

The Swedish music streaming company not only had the top-performing music stock of the year, but its share price’s gain nearly tripled the next best company. Despite ending the year on a four-week losing streak during a downturn that eroded an otherwise spectacular year for many markets and indexes, Spotify’s share price jumped 138.1% to $447.38 in 2024.

Layoffs and price increases in 2023 did wonders for Spotify’s financial statements. Headcount was reduced by about 25%, eliminating the bloat gained during a pandemic-era hiring spree that mirrored a boom in subscriber gains. At the same time, Spotify broke with its long-standing tradition of leaving prices untouched by hiking fees in the U.S. and many other major markets — followed by a second price hike in 2024 in the U.S. and U.K. After more than a decade of adding features and expanding editorial programming, the streaming giant believed it could finally raise prices without its customers fleeing to competitors (many of whom raised their prices before Spotify). It was right.

The one-two punch quickly produced results. Perpetually unable to turn a profit, Spotify went from an average quarterly operating loss of 112 million euros ($121 million) in 2023 to an average quarterly operating profit of 296 million euros ($322 million) in the first three quarters of 2024. Gross margin (revenue less cost of sales) shot up, too, from 24.1% in the second quarter of 2023 (the last period before the first price increase) to 31.1% in the third quarter of 2024. Subscribers didn’t just stick around, they grew in numbers, from 220 million before the first price increases to 252 million on Sept. 30, 2024.

Investors have rewarded Spotify for becoming a more efficient business without sacrificing the product quality necessary in a competitive market. An investment in Spotify on Nov. 4, 2022, when the share price reached an all-time low of $69.29, would have returned 446% by the end of 2024. For a brief time in early December, Spotify’s market capitalization surpassed $100 billion.

The 20-company Billboard Global Music Index gained 38.5% in 2024, easily besting the tech-heavy Nasdaq Composite (up 28.6%), the S&P 500 (up 23.3%), the Shanghai Composite Index (up 12.7%) and the FTSE 100 (up 5.7%). Because the index is unweighted, Spotify, the index’s largest company by market value, was responsible for much of that improvement. Without Spotify’s gain, the index would have risen just 2.5%.

Streaming and live music accounted for eight of the 10 music stocks that posted gains in 2024, reflecting these companies’ ability to capture the financial benefits of consumers’ willingness to spend more on music. Despite Spotify’s enormous improvement, live music was the best segment with an average gain of 24.8%. Live Nation was the index’s second-best performer with a 38.3% gain, besting German promoter CTS Eventim (up 30.4%), Sphere Entertainment Co. (up 18.6%) and MSG Entertainment (up 11.8%). These companies have benefitted from music fans’ ability to withstand consistently higher prices. Last year, the average ticket price for the top 100 tours was $132.30, up from $119.64 in 2023, according to Billboard Boxscore.

Music streaming stocks posted an average gain of 23.0%. Chinese music streaming companies Cloud Music and Tencent Music Entertainment gained 27.2% and 26.0%, respectively, and U.S.-based LiveOne gained 5.0%. Abu Dhabi-based Anghami and French streamer Deezer were exceptions to music streaming’s banner year. Anghami fell 21.2% while Deezer slipped 37.1%.

Record labels and music publishers — here classified as multi-sector companies — continued to expand their revenue in 2024 but didn’t have the momentum of live and streaming companies. Universal Music Group (UMG) fell 4.2% even though its sales through the third quarter reached 8.4 billion euros ($9.1 billion), up 6.3% from the prior-year period. Warner Music Group (WMG) dropped 13.4% after its revenue for the fiscal year ended Sept. 30 rose 6% to $6.4 billion. Both companies’ recorded music streaming revenue grew nicely, too — 7.3% for UMG and 6.9% for WMG — but investors rewarded streaming companies, not record labels, for subscriber and pricing gains.

K-pop companies were down across the board in 2024. HYBE, SM Entertainment, YG Entertainment and JYP Entertainment lost an average of 19.0% last year after gaining an average of 30.0% the prior year. Some of the decrease can likely be attributed to sharp profit declines and uneven revenue growth in recent quarters, though it can also be attributed to the rough year for South Korean stocks in general. The KOSPI composite index dropped 9.6% and was already in poor shape when South Korean Prime Minister Yoon Suk Yeol declared martial law on Dec. 3.

French music company Believe is an outlier in the multi-sector category, though most of its 37.1% gain can be attributed to the deal in June that took the company private at a 21% premium. Another notable outlier is Reservoir Media, which gained 26.9% without the benefit of a transaction to boost the share price. Instead, Reservoir shares were helped by activist investor Irenic Capital Management LP, which took an 8.1% stake in September and called on the “undervalued” company to “undertake a full review of all alternatives” to maximize shareholder value. From the date of Irenic Capital’s regulatory filing to the end of the year, Reservoir Media shares rose 17.8% while other multi-sector stocks either barely improved or lost value.

Radio companies have not been darlings of Wall Street in recent years, and 2024 was no exception. For all the optimism espoused by broadcast and satellite radio companies, they continue to struggle in an increasingly streaming-based world. The worst-performing music stock of the year was Cumulus Media, which fell 87.4% to $0.67. Through September, Cumulus’ revenue was down 2.4% and its net loss more than doubled. SiriusXM fell 58.3%, with much of that decline coming after the company announced plans to focus on in-car satellite listening after its streaming app, launched in late 2023, failed to catch on with consumers. iHeartMedia dropped 25.8% but ended the year on a high note after exchanging much of its long-term debt to extend maturity dates.