MI363: Valuing Universal Music Group w/ Shawn O'Malley
The Intrinsic Value Podcast - The Investor’s Podcast Network
Financial Dynamics of Music Industry
This chapter explores the financial intricacies of Universal Music Group, emphasizing the comparative value of recording rights versus publishing rights. It also covers the impact of streaming and private equity interests on revenue generation and artist development in the music industry.
In today’s episode, Shawn O’Malley (@Shawn_OMalley_) breaks down Universal Music Group’s stock and what the music industry looks like from music labels’ perspective.
You’ll learn why Universal Music Group is a more reliable bet on the music industry than Spotify, why music labels have such compelling economics, Bill Ackman’s rationale for owning Universal, how AI could impact the music industry, and whether Universal is currently undervalued, fairly valued, or overvalued, plus so much more!
IN THIS EPISODE, YOU’LL LEARN
00:00 - Intro
00:19 - Why Universal is a more reliable bet on the music industry than Spotify
03:44 - How streaming has increased the value of music rights
05:16 - What music labels do for artists
06:40 - What Universal’s advantage is as the largest global music label
07:44 -How Universal’s revenue streams breakdown
12:45 - Why Universal’s business is like selling shovels in a gold rush
18:30 - Why big stars still need music labels
18:50 - How Universal split off from Vivendi
20:40 - The risks from AI and Bill Ackman’s thoughts on AI
25:24 - What happened during Universal’s feud with TikTok
28:00 - What Universal’s health and wellness ambitions are for music
30:29 - Which challenges could hinder Universal the most
35:02 - How to value Universal like Bill Ackman
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
- Bill Ackman’s presentation on Universal stock.
- Music Streaming Royalties 101 article.
- Check out the books mentioned in the podcast here.
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