On a related note, information about podcasts could have reinforced some investors’ belief that non-music content can improve both growth and margins. Spotify’s run-down of most popular music and podcasts revealed The Joe Rogan Experience, exclusive to Spotify as of Tuesday, is its top podcast. Its popularity suggests the controversial podcast is going to be worth the $100 million Spotify is spending to license the show from Rogan. Owned and licensed podcasts give Spotify a chance to differentiate itself from its competitors. In the last two years, Spotify has purchased podcast producers The Ringer, Gimlet and Parcast and has landed exclusives with Michele Obama and Kim Kardashian West, among many others. It has also launched proprietary, music-focused franchises such as Sound Stories: Women in Hip-Hop and Butt Dial.
The second news item was about an anti-plagiarism tool that Spotify has filed for a patent in Europe. The unnamed technology ingests a songwriter’s lead sheet — think sheet music with notation — to compare the song to Spotify’s database and spot instances of infringement. The technology’s value is obvious: it can help songwriters avoid copyright infringement litigation and help Spotify weed out problematic musical works from its database. But does the subject of plagiarism and how to avoid it excite investors? Probably not.
Wednesday’s growth spurt underscores how investors think about tech companies versus the media companies that provide them content. Spotify’s high price on Wednesday nearly doubles the value of Universal Music Group’s €30 billion ($33 billion) valuation when Tencent acquired 10% of the company in March. Spotify’s value was still jaw-dropping after its midday slide. Shares of Spotify fell to $310.41, an 8.9% increase for the day, giving the company an enterprise value of $57 billion. In comparison, Warner Music Group, the third largest music company, was valued at $17.8 billion at $29.92 in the early afternoon Wednesday with stocks rising 2.1% to $29.92. Warner’s share price is 13.9% below its all-time high of $34.76 and 16.8% above its low of $25.61 on Nov. 4.
