TD Cowen flags Spotify's value being higher than recording and publishing cos
TD Cowen flags a major valuation gap in the music industry
Spotify SPOT.N , which owns little content, is now valued at $177 bln, more than that of the entire recorded music and publishing industry combined at $169 bln
"We firmly believe that 'content is king', and it is hard for us to square that belief with the market's current verdict that in the music industry, distribution is worth several times more than content ownership" - brokerage
Brokerage maintains 'buy' ratings on UMG UMG.AS , WMG WMG.O , Sony 6758.T , and Live Nation LYV.N , and 'hold' on Spotify, citing strong fundamentals and the upside from new "Streaming 2.0" deals
For SPOT, despite platform leadership, TD Cowen sees limited margin upside due to rising content costs and regulatory headwinds
LYV remains a standout in live entertainment, with strong demand and new venues expected to drive growth despite weather-related disruptions
"We also believe that music fundamentals should generally remain strong regardless of macro turbulence"
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