Spotify Gains Leverage on Music Industry
Spotify (SPOT) and Vivendi’s Universal Music Group have reached a new licensing agreement for data analytics, according to a report Wednesday morning from Reuters.
The companies will collaborate on marketing campaigns informed by Spotify’s data analytics platform.
The reliance on what Spotify brings to the table highlights an important new business model for the Swedish media streamer. For a long time the company was completely at the mercy of the record labels for content licensing. However, the scale and digital nature of the platform is forcing the relationship to evolve.
It’s a bigger idea I wrote about earlier this month.
Spotify is sitting on a mountain of data that can be mined and manipulated to create new revenue streams and gushers of wealth for shareholders. It’s why the stock is going up. Investors are beginning to realize, that in addition to being the best media streamer, Spotify is becoming a data analytics company, too.
As these business opportunities mature, look for shares to rise further.