The Music Industry: Undervalued and Full of Potential

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  Serge Nussbaumer
  Chefredaktor

What is the investment objective of the MUSQ Global Music Industry Index ETF, and how does it differ from traditional sector ETFs?

The investment objective of the ETF is to track the performance of the MUSQ Global Music Index, offering investors targeted exposure to the entire global music industry. This includes a broad range of segments such as streaming platforms, musical content and distribution, live music events and ticketing, as well as equipment and technology companies involved in the music sector.

What sets the ETF MUSQ apart from traditional sector ETFs is its specialized focus on the multifaceted music industry, rather than concentrating solely on a conventional sector like technology, consumer discretionary, or media. While traditional sector ETFs typically group companies by general industry classifications, the MUSQ ETF provides exposure to companies across several different sectors, as long as they are integrally connected to the broader music ecosystem. This approach allows investors to participate in the growth and innovation across all areas of the global music business, not just in a single sector.

Which sub-segments of the music industry does the ETF cover?

The ETF covers several important sub-segments of the music industry: it includes companies involved in streaming, content and distribution, live music events and ticketing, as well as equipment and technology. This broad approach ensures that investors gain exposure to the diverse facets of the global music market.

How is the ETF’s portfolio structured, and how are the weightings determined?

The ETF’s portfolio is structured based on a set of clearly defined index construction and constituent selection criteria. Only companies that are either principally engaged (“Pure-Play”)—deriving at least 50% of their revenues from the music industry’s eligible sub-segments—or significantly engaged (“Diversified”), with more than 20% of their revenues independently reported from these areas and substantial related impact or strategic focus, are considered for inclusion. The eligible sub-segments include music streaming, music content and distribution, live music events and ticketing, and music equipment and technology.

To ensure liquidity and investability, companies must also meet minimum thresholds for market capitalization (USD 100 million), average daily traded value (USD 500,000), and free float (20%). Furthermore, at least 40% of the index weight is allocated to non-US domiciled companies, and companies from a minimum of three different countries are included.

Regarding the weighting: the portfolio is split into two tranches – a Pure-Play tranche (80% of the index) and a Diversified tranche (20%). Within each tranche, constituents are weighted by their free-float market capitalization, subject to diversification constraints: no individual constituent may exceed 12% weighting, each must have at least 0.25%, emerging market constituents are capped at 20%, and the combined weight of all positions above 5% cannot exceed 45%. Excess weights are reallocated across the remainder of the portfolio to maintain these limits. This structure seeks to balance industry representation while maintaining diversification and liquidity.

Which companies currently represent the largest holdings in the fund?

The largest holdings in the MUSQ Global Music Industry Index ETF are currently represented by the following companies: Spotify Technology S.A. (10.78%), Live Nation Entertainment, Inc. (9.62%), Universal Music Group N.V. (9.20%), Tencent Music Entertainment Group (8.97%), CTS Eventim AG & Co. KGaA (7.22%), Amazon.com, Inc. (5.32%), HYBE Co Ltd. (4.93%), Alphabet Inc. (4.84%), Madison Square Garden (4.75%), and Apple Inc. (4.31%). Together, these top 10 constituents account for approximately 69.93% of the fund’s total index weight.

How frequently is the portfolio reviewed and adjusted?

The portfolio of the MUSQ Global Music Industry Index ETF is reviewed and adjusted on a quarterly basis. This means that the holdings and their weightings are rebalanced every three months to ensure the ETF remains aligned with its underlying index and methodology.

What is the current state of the global music industry, particularly with regard to streaming and live events?

The global music industry is currently experiencing strong growth and transformation, driven largely by the expansion of streaming and the resurgence of live events. These trends underscore a vibrant and rapidly evolving market, particularly in digital consumption and live concert experiences.

What is the current size of the global music market, and what are the forecasts for the coming years?

According to Goldman Sachs, the industry is valued at USD 104.9 billion and is projected to nearly double to USD 196 billion. by 2035. Paid music streaming continues to be a key driver, with global subscribers expected to reach USD 827 million in 2025, marking 10% year-over-year growth from USD 752 million in 2024. Live music is also thriving, with revenues forecast to jump from USD 34.6 billion in 2024 to USD 67.1 billion by 2035.

Breaking it down by segment:

• Recorded music is projected to grow from USD 29.6 billion in 2024 to USD49.5 billion in 2030 and potentially USD 55 billion by 2035.
• Music publishing revenues are expected to rise from USD 9.9 billion in 2024 to about USD 14.9 billion – USD 15.3 billion in 2030, and USD 18.9 billion in 2035.
• Live music is forecasted to see a strong expansion, rising from $34.6billion in 2024 to USD 52.6 billion – USD 51.7 billion by 2030, and up to USD 67.1 billion by 2035.

These projections reflect robust demand across digital streaming, live events, and diverse publishing revenues. The industry is expected to nearly double in size over the next decade, propelled especially by paid streaming growth and the resurgence of live music globally.

Which trends are having the strongest impact on the music industry?

One of the strongest trends shaping the music industry is the rapid growth of paid streaming subscriptions, with the number of global subscribers expected to double and surpass 1billion by 2035. This shift toward digital platforms is fundamentally transforming how music is consumed and monetized worldwide. Additionally, there is a broad industry consensus that music remains undervalued and undermonetized compared to other forms of entertainment. As a result, key players are increasingly focused on improving monetization through pricing strategies, product innovation, and better segmentation, aiming to close this value gap and unlock new revenue streams for artists, rights holders, and music companies.

How resilient is the music industry compared to other areas of entertainment?

The music industry demonstrates strong resilience compared to other entertainment sectors. One reason is that music is considered an uncorrelated asset class – it tends to move independently of broader market trends and is not directly affected by tariffs or global trade issues. This stability makes it attractive even during periods of economic uncertainty.

Furthermore, music remains undervalued relative to other entertainment options: for example, a Spotify subscription generally costs about half as much as a standard Netflix subscription, providing significant value for consumers. Streaming platforms like Spotify are also able to adjust their pricing regularly, often increasing rates each quarter without seeing major drops in subscriber numbers. This combination of steady demand, affordable pricing, and independence from outside shocks underpins the relative resilience of the music industry.

How is the industry responding to challenges such as recessions or technological disruptions?

The music industry has proven highly resilient during recessions and technological disruptions. Music consumption continues to grow in good times and bad, as people consistently seek out music for comfort and entertainment. Streaming revenues, which are subscription-based and less affected by economic shocks or tariffs, help stabilize the industry. While AI is changing production, it has had little impact on market saturation or piracy so far, with the biggest threats still being managed through evolving business models and copyright protections.

Which growth drivers do you see for the music industry by 2030?

The ETF provider sees several strong growth drivers for the music industry by 2030. Streaming remains the most significant factor, with developed markets growing at about 10% annually and emerging markets seeing growth rates as high as 25%. This rapid adoption in emerging economies is expected to play a major role in the industry’s expansion, helping the global music market nearly double in size by 2035. In addition, live music is thriving, highlighted by blockbuster tours from artists like Taylor Swift and Beyoncé as well as groundbreaking new venues such as the Sphere in Las Vegas. These developments in both digital streaming and live entertainment are creating powerful momentum for the industry’s continued growth over the coming years.

Finally, on a single-stock basis, what are your three favourites and why?

My three favorite single stocks in the music industry are Spotify, Live Nation, and Universal Music Group. Spotify leads the streaming category, continually innovating and expanding its user base worldwide. Live Nation dominates live music, benefiting from the strong demand for concerts and large-scale events. Universal Music Group stands out in content ownership and music publishing, with a vast catalog and global influence. Each of these companies is a market leader in its respective segment – streaming, live events, and music content – making them standout choices for long-term growth in the industry.

Thank you.

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David Schulhof
Founder and CEO of MUSQ, LLC.

David Schulhof is an American music industry executive and investor with 25 years of experience in the field. Most recently, David developed the MUSQ Global Music Industry ETF (NYSE: MUSQ), a cutting-edge fund designed to offer investors pure-play exposure to the global music industry.

David’s background in the music industry is extensive, having previously served as President of Music Publishing at LiveOne, a global media company for livestream and on-demand audio, video and podcast content. He is also the former President of Music at AGC Studios and IM Global Studios and was the co-founder and CEO of Evergreen Copyrights, where he pursued a global acquisition strategy of music publishing catalogs and built one of the largest independent music companies worldwide, which eventually was sold to BMG Rights Management. David received a B.A. from Georgetown University and a J.D. from the NYU School of Law. He is a member of the New York State Bar.