Investing in Music Stocks

As a form of entertainment, music is timeless, but the music industry itself has been seriously disrupted over the past generation. Aspiring artists now seek to develop a following through social media platforms and streaming services, and the live music industry continues to grow.

Power and influence in the music industry have been decentralized, which creates both opportunities and challenges for music industry companies. Manufacturers and sellers of equipment such as speakers and instruments, music streaming companies, record labels, event organizers, and terrestrial and satellite radio companies are all participants in the music industry.

Top music stocks

Top music stocks in 2025

These are some of the best music companies in 2025:

1. Spotify

1. Spotify

Spotify pioneered legal music streaming more than a decade ago. It has since expanded beyond music by acquiring several podcast franchises. The streaming giant now counts high-profile creators such as Joe Rogan and Bill Simmons among its podcasters.

Spotify's paid subscriber base has now reached 268 million, growing 12% in the first quarter of 2025. It had more than 600 million monthly active users, which included ad-supported listeners.

Along its path to success, the company has beaten back consistent threats from Apple (AAPL 2.04%) and others. It now tops the iPhone maker in podcast listeners, making it the No. 1 podcast platform in the U.S. and showing that the pure-play audio stock is beating the tech giant. 

Spotify's profits are starting to ramp higher after years of investment. The company should benefit from the subscription business model, which means that most of its incremental revenue flows directly to the bottom line as the marginal cost of adding a subscriber.

The company is now profitable on an International Financial Reporting Standards (IFRS) basis. The future looks bright for Spotify as its revenue growth is solid and its margins should continue to expand.

2. Sirius XM Holdings

2. Sirius XM Holdings

As the only satellite radio provider in the U.S., Sirius XM stands out for relying on satellites to transmit its music and other audio content. The company can provide reliable service in places where internet-based music platforms fall short. SiriusXM is most often used inside vehicles as most models have its technology automatically installed.

The company provides a range of audio entertainment, including music, sports, news, talk, and traffic and weather updates. Its brand may be best associated with Howard Stern, the shock jock who attracted much attention in 2005 when he took his talk radio show to SiriusXM. However, Stern's contract expires in December 2025. Stern, who was 71 as of this writing, seems to be leaning toward retirement.

Sirius also acquired Pandora in 2019, increasing its exposure to music streaming, but the company lags well behind Spotify in that area.

The satellite radio company has historically increased its revenue at a modest pace because growth in the on-demand music business has favored streaming services. However, revenue has been roughly flat since the start of 2023.

As of the first quarter of 2025, the company had 33 million subscribers on SiriusXM and 5.7 million on Pandora.

Improved internet connectivity and the expansion of 5G networks pose a longer-term threat to Sirius XM, as do new technologies like Elon Musk's Starlink and Amazon's (AMZN -0.61%) Kuiper. At the same time, its relationships with automakers give it a unique advantage since its satellite radios are pre-installed in nearly every new vehicle in the U.S.

3. Sonos

3. Sonos

Wireless speaker maker Sonos calls itself the inventor of multiroom wireless audio products. With around 100 streaming partners, including Apple Music, Pandora, and Spotify, Sonos finished its fiscal year 2024 with 50.4 million products registered in 16.3 million households.  

After posting strong results earlier in its history, revenue growth has faded. A problematic app update earlier in 2024 also plagued the company, leading to the ouster of CEO Patrick Spence and the layoff of about 200 employees.

The company also faces competitive threats from tech giants such as Amazon, Alphabet's (GOOG 0.86%)(GOOGL 0.82%) Google, and Apple, all of which are investing significant resources in their own smart speakers. Investors in Sonos should be aware of these competitive pressures.

4. Live Nation Entertainment

4. Live Nation Entertainment

Live Nation Entertainment, which owns Ticketmaster, has a near-monopoly in concert ticketing, with a more than 70% market share. Recording artists are increasingly performing at live events to earn money since CD sales are essentially dead, and music festivals have become more popular in the era of social media.

Demand for live events remains strong, and Live Nation is benefiting. The company posted record results in the first quarter and said it sold 95 million tickets, up double digits from a year ago.

The business still has a bright future ahead, considering the strong demand among millennials and Gen Z for spending on experiences, and its monopoly-like advantage should ensure superior margins.

5. iHeartMedia

5. iHeartMedia

Formerly known as Clear Channel, iHeartMedia is the biggest operator of broadcast radio stations in the U.S. It finished 2024 with 250 AM stations and 619 FM stations and, in the same year, had the most No. 1-ranked stations across the top markets, including 24 top-ranked stations in the 50 biggest markets. The company also operates iHeartRadio, a digital audio streaming service that gives users access to both streaming music and the digital feeds of radio stations nationwide.

Broadcast advertising is the company's primary source of revenue, but competition from platforms like Spotify seems to be eating into the company's market share. The business returned to revenue growth in 2024 after a decline in 2023, though. In 2024, revenue rose 3% to $3.85 billion as the company benefited from political advertising in the second half of the year. It's also taken impairment charges of almost $1 billion in each of 2023 and 2024, showing the declining value of terrestrial radio licenses and write-offs in its goodwill.

Historically, the company's advertising model has been highly profitable, and its reach gives it a competitive advantage since iHeartMedia can offer advertisers the most exposure in radio by far. 

Since the digital radio space is crowded with competition from Spotify, Sirius XM, and others, terrestrial radio appears to be in long-term decline, so the future could be challenging for iHeartMedia.

6. Warner Music Group

6. Warner Music Group

Legacy record labels such as Warner Records, Atlantic Records, Asylum, and Elektra, all of which are owned by Warner Music Group, still help high-profile musicians with marketing, management, and production. Ed Sheeran, Cardi B, and Bruno Mars all have contracts with labels owned by Warner Music Group.

The company earns most of its money from recorded music and also generates revenue from music publishing, which is the acquisition and licensing of musical compositions. Both of those categories are growing as the recorded music business enjoys a significant boost from the rapid growth in music streaming.

Through the first half of fiscal 2025, revenue has fallen 3% to $3.15 billion, though management said it's gaining market share in new releases. It's also facing difficult comparisons with its strong performance in the quarter a year ago.

Pros and cons

Pros and cons of investing in music stocks

There are both pros and cons to investing in music stocks.

Music is a timeless interest, and there will always be a business surrounding it. That includes both demand for live events as music and concerts continue to be a strong draw for young adults, and recorded music, even as the way we consume recorded music has changed significantly. Let's take a look at the pros and cons of music stocks.

Pros:

• There's consistent global demand for music entertainment.
• Music festivals and concerts are highly popular with young adults.
• New technologies and media have made it easier for audiences to find new music.
• Leaders like Spotify and Live Nation show music stocks can be big winners.

Cons:

• Technology can change quickly, rendering leaders obsolete and changing business models.
• Demand can fluctuate depending on the popularity of top artists.
• Changes in technology and tastes make the industry risky.
• Tech giants pose a threat to the music industry.

Related investing topics

Should you invest?

Should you buy music stocks?

Even the best companies in the music industry are facing major competition from the giants in the tech sector. Music entertainment stocks can still be winners, but prospective music company investors should pay attention to how the industry is changing. The best music companies are well-positioned to compete aggressively and can stay ahead of the evolution of the music industry.