how much Spotify pays the music industry. Zgutowicz is hinting that, as podcasts become an increasingly bigger entity on Spotify, they could loosen record labels’ command of future deal terms - i.e. (Shares had hovered around $140 pre-COVID.) In addition to “attractive monetization potential” from these podcast deals, Zgutowicz suggested that Spot could also create “future leverage to premium subscription pricing and label negotiations.”
One of the most telling of these analyst notes came on June 19th from Rosenblatt Securities analyst Mark Zgutowicz, who increased his Spotify share price target to $275. Top analysts immediately nudged up their price targets for Spotify, driving investor enthusiasm and sending the market cap spiraling ever-upward.
Universal held on, and its stake is now worth $1.74 billion, while Sony Music’s remaining stake (around 2.9%) is worth $1.42 billion. Its rivals bailed: Within 90 days of Spotify going public, indie label group Merlin sold its entire stake, worth around $100 million Warner Music Group sold its entire stake, worth $504 million and Sony Music Entertainment hedged by selling 50% of its stake, collecting $768 million.
After SPOT started trading on the New York Stock Exchange in April 2018, UMG resisted the temptation to dump its reported 3.5% holding in the streaming company. Last Thursday, Spotify’s market cap soared to an all-time high of $49.7 billion - well above what shares traded at when it went public two years ago.Īt first glance, Spotify’s rapid share boom appears excellent news for the commercial status of music, and especially for music’s biggest company, Universal Music Group (UMG). Had you invested $1,000 in Spotify in the midst of market-zapping pandemic uncertainty in March, you’d have more than doubled your money. Had you invested $1,000 in Spotify on January 1st this year, you could pull out $1,800 right now.
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