Music streaming has been gaining popularity over the past few years owing to the convenience it provides. With the help of a stable Internet connection, users can stream and listen to a diverse library of songs, suited to their liking, without the compulsion to download any of them on their devices. Notably, per a report by Research and Markets, the global music streaming market size is estimated to reach $60.5 billion by 2026 at a CAGR of 16% during the forecast period, as quoted in a
GlobeNewswire article
.
The article mentioned that the rising number of Internet users as well as increasing usage of smartphones and laptops stand to contribute to the growth of the market during the forecast period. Moreover, the article stated that the availability of music suiting the user’s mood and time is also another reason which is set to bolster the growth, along with technologies like voice recognition that is helping in improving consumer experience.
In fact, Statista estimated that user penetration for music streaming worldwide is set to
be 8.3%
in 2021 and reach 11.6% by 2025. Notably, the average revenue per user is estimated to amount to $36.81 in 2021. Moreover, Statista also mentioned that the United States is set to generate the highest revenues in music streaming in 2021.
COVID-19 Pandemic Aids Music Streaming Growth
The COVID-19 pandemic has also provided a major boost to music streaming. As the pandemic forced people to enter a lockdown to contain the spread the virus, they had to restrain from visiting movie theatres, restaurants and so on, and were forced to resort to in-home forms of entertainment. Notably, music streaming happened to be one of them.
In fact, music streaming witnessed steady growth in the United States. Per an MRC Data report, total on-demand audio streaming volume in the United States was up 17% in 2020, increasing by 126.7 billion plays, as mentioned in a
Music Business Worldwide article
. Moreover, the article mentioned that on-demand audio plays on music streaming services in the United States was reported at 872.6 billion in 2020 compared to 745.9 billion in 2019.
3 Stocks to Watch
The global music streaming industry looks set to witness growth going forward due to the convenience it provides. Users have the option to choose from a diverse library of songs that cater to their mood at the moment without requiring to download the songs on their devices. This makes it a good time to look at companies which are focused on music streaming and stand to make the most of the potential of the market in the near future. Notably, we have selected three such stocks that carry a Zacks Rank #1 (Strong Buy) or 3 (Hold). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Apple Inc.
AAPL
designs, manufactures, and markets smartphones, personal computers, tablets, wearables and accessories worldwide. Notably, the company has a music subscription service named Apple Music, which allows users to stream songs or listen to on-demand radio stations. It currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 11.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 36.3%.
Amazon.com, Inc.
AMZN
engages in the retail sale of consumer products and subscriptions in North America and internationally. Notably, the company has its own music streaming platform called Amazon Prime Music and it is offered for free with the Amazon Prime membership. Amazon currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 8.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 16.1%.
Alphabet Inc.
GOOGL
provides online advertising services and operates through Google Services, Google Cloud and Other Bets segments. Notably, Google’s subsidiary YouTube has a music streaming platform named YouTube Music, which allows users to stream through a library of songs and music videos suited to their liking. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 9.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 16.1%.
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