This text provides an analysis of Spotify’s position in the music industry and its potential for growth and valuation. It highlights Spotify’s disruptive influence, its benefit to artists by removing intermediaries, and its focus on curation and discovery, which sets it apart from competitors. The text also discusses Spotify’s potential for reinvestment, including expansion into new businesses such as podcasts and original content, data analytics, and vertical integration into the music industry. It concludes that Spotify’s current business is trading near fair value but sees upside potential from these reinvestment opportunities and its holding in Tencent Music.
In summary, Spotify is viewed as a high-quality business with sustainable competitive advantages. It recognizes the importance of curation and discovery in music streaming, offers opportunities for artists to directly connect with fans, and has the potential to expand its revenue streams through new business ventures. The analysis suggests that the market’s valuation of Spotify’s current business is achievable, and there are further opportunities for growth and upside to its valuation.
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