These 4 stocks are set to win the streaming music game
But it's hard to argue with the trends. Streaming music is here to stay in some form or another. All that's left to determine is who is going to come out on top when the dust settles?
Universal Music Group, Sony, Amazon and LOEN are a good bet, according to Giasone Salati of Macquarie Research. Each of the companies holds a competitive advantage against their peers.
"We argue that the music industry is on the verge of a structural multi-decade growth period, which will likely benefit all industry players, at this early stage," Salati said.
"Still, our stock selection is relatively narrow."
Recorded music revenues are set to double in the next ten years, according to Salati. Streaming music is a big enabler of that growth, as the format captures a higher revenue than older media.
With other formats like CDs, hard prices don't allow companies to optimize the revenue they receive per customer. With reoccurring subscription payments found in most streaming services, revenue has the ability to be flexible. Salati explains it like this (emphasis added):
When you consider the ability to maximize revenue from each customer, it makes sense that streaming will take off.
But who will win the streaming music takeover? Read on to find out...