The performance of music stocks this week was a microcosm of the entertainment industry this decade, with streaming companies making up the top four performers, while legacy broadcast stocks finished at the bottom of the pile.
Chinese music streaming company Tencent Music Entertainment rose 6.0% to $10.95 after the company reported encouraging full-year earnings results on Tuesday (March 19). Although overall revenue fell 2.1%, the online music side of the business is booming. Subscription revenue from QQ Music, Kuwo Music and Kugou Music rose 39.1% to $1.7 billion, while the number of subscribers increased by 18.2 million to 106.7 million. Tencent Music shares hit a 52-week high of $11.80 on Thursday (March 21), but fell 4% on Friday (March 22) after news that Zhenyu Xie, president/chief technology officer, tendered his resignation. Xie will be replaced on the board by the CFO Shirley Hu.
Spotify gained 3.9% to $264.95, bringing its year-over-year improvement to 41.0%. On Tuesday, the streaming company released its fourth annual Loud & Clear report, an analysis of the previous year's rights payments. In 2023, the number of artists who received at least $10,000 from Spotify grew 16% to 66,000 — 2.7 times more than the number who received that much in 2017. The number of artists who earned $1 million or more from Spotify increased 18% to 1,250 .
Two smaller companies made even bigger gains. Anghami shares jumped 56.8% to $1.74 this week and hit $2.20 after a regulatory filing revealed that Saudi media company MBC Group had amassed nearly 14% of the music streamer based in Abu Dhabi. The investment helped give Anghami some breathing room after Nasdaq warned in October that the stock was facing a write-off because it had closed below $1 for the previous 30 days. Anghami closed below $1 from February 1st to March 7th, but closed above $1 since March 15th.
LiveOne jumped 10.9% to $2.04 after announcing on Monday (March 18) that it expects record quarterly revenue helped by increased Tesla sales, 30 new podcasts and more than $2 million in monthly recurring revenue from its customers of B2B flow activity. In addition, the company revealed that it repurchased $250,000 worth of stock in the previous 30 days and wrote off $3 million in payables from PodcastOne, the podcast company it spun off in September 2023.
Gains by streaming companies helped the Billboard Global Music Index rise 1.3% to a record 1,719.66 this week, snapping a two-week slump and surpassing the previous record of 1,715.81 set in the week ended March 1 . The 20-company index had an even number of winners and losers.
Major indexes rose to new highs after the U.S. Federal Reserve said the central bank still expected three rate cuts in 2024 despite a recent pick-up in inflation. In the United States, the Nasdaq composite rose 2.9 percent to 16,428.82, a fresh closing high, and hit an intraday high on Thursday. The S&P 500 ended the week up 2.3% at 5,234.18, even after falling 0.1% on Friday. In the UK, the FTSE 100 gained 2.6% to 7,930.92 points. South Korea's KOSPI composite rose 3.1 percent to 2,748.56. China's Shanghai Composite fell 0.2 percent to 3,048.03.
Broadcasters were at the opposite end of the spectrum. The index's biggest decliner was iHeartMedia, which fell 7.7% to $1.91. After a sluggish year for national advertising, iHeartMedia executives have predicted that 2024 will be “a turnaround year” and that the decline in first-quarter revenue will be less severe than in previous quarters. Maybe so, but investors have sent its stock down 28.5% year to date.
Two other radio companies were among the four lowest performing stocks. Shares of Cumulus Media fell 6.6% to $3.41 and are down 35.9% in the first 12 weeks of the year. Cumulus revenue fell 11.4% in 2023 and the CEO Mary Berner warned investors in February that “volatile” demand for advertising limited its ability to forecast 2024.
SiriusXM, which is upbeat about its redesigned streaming app, fell 4.2% to $3.88 and is down 29.1% this year. Liberty Media, which owns 84% of SiriusXM's existing stock, plans to merge SiriusXM stock with Liberty SiriusXM track stock later this year.
