Spotify seeing up and down days trading the first two days of this week.
Shares of the music streaming service app jumping 5% Monday as they announced subscription price hikes, though it did give back some of those gains yesterday.
Spotify's hefty stock price shows how music is a global multi-billion dollar industry.
This sector of the economy is hot during the summer months with tours from Beyonce, Billie Eilish, Kendrick Lamar, and more taking place.
Well, joining me live here at the New York.
Stock exchanges David Schulhoff, who's the founder and CEO of MUSQ Global Music Industry ETF.
David, so great to have you here.
Thank you so much for joining me.
Great seeing you, Remy.
Well, music as an asset class, tell me about the why behind the buy.
So music is a very uncorrelated asset class.
It doesn't really swing with the tides of the markets.
It's not impacted by tariffs.
It's very resilient, and music is simply very undervalued and very.
Monetized.
Spotify, you saw raised rates again earlier this week, and they're going to continue to do so.
And so our fund is up 18-19% year to date.
It's performing very well and and all these streaming services that we have in our fund, they're all going to continue to raise prices to get on par with Netflix and Hulu and you know, companies like HBO Go because music's really cheap at $11 or $12 a month, you know, they should be charging a lot more than that.
So give us an understanding of some of the holdings that you have in your fund and why it's so important to understand what's happening with this industry under the surface.
Yeah, so, OK, MUSQ, we are a very convenient way to invest across streaming content.
Live music events and ticketing and equipment and technology.
So we have companies like Universal Music Group, Warner Music Group, Sony on the content side.
We have companies like Spotify, Apple, Amazon, Google, a lot of companies in South Korea on the streaming side.
And then we have companies like Live Nation and CTS Aventum and Sphere on the live music events and ticketing sites, so we're giving investors a cross section of exposure globally to all these equities that are invested in music, in live music event and ticketing, and then we have companies that are involved in AI and technology companies like Yamaha, Dolby, Rollin.
We have anywhere from 30 to 35 holdings in our fund.
Half the companies are international holdings.
A lot of investors aren't familiar with, and a lot of and half the holdings are domestic equities.
Yeah, David, you mentioned some familiar household names right there, but it is earnings season.
We got results out from Spotify as well as Universal Music Group.
So what did you make of those results and is this a buying?
Opportun OK.
Spotify fundamentals were very strong.
Monthly active users were up 10%, you know, close to 700 million.
Paid streaming subscribers were also up 10% to 270 million.
The stock's been performing so well it actually got hit with taxes, which is why you saw it go down, but the fundamentals were very strong, and then it rebounded quite nicely earlier this week.
Universal Music Group that was up, you know, 6 or 7%, because remember when you raise rates and when streaming performs well, 70% of those revenues get paid to all the content holders, so they're kind of like working together hand in hand.
And so look, all these holdings in our fund are doing really well.
Spotify is up over 100% for the last 12 months.
Universal is up 40%, and then Live Nation is going to report on Thursday, but we're expecting some promising results from that company as well.
Yeah, and it's hard to believe, but it's the beginning of August and the days are slowly getting shorter and it does mean back to schools right around the corner here.
But when it comes to summer live events, give us your takeaways, what we've seen and what's still left of the summer.
So this is like one of the biggest summer in tours, I mean.
Beyonce finished her Cowboy Carter tour, which was the biggest country music tour in history, and then you had Kendrick Lamar and Sizza.
You had country artists like Kenny Chesney at The Sphere, of course, Coldplay, we can't forget Coldplay this summer, and so it's been an amazing the only artist that didn't perform this summer was.
Taylor Swift was the only big name because she wrapped up for Aerostore in December, but look, it's been a massive summer for tours, and we have all the holdings in the fund that invest in these tours from CTS Aventum to Madison Square Garden to Live Nation, and so and companies like Vivid Seats that do all the ticketing, so we've, you know, these are all promising results that we've seen.
Yeah, and finally, I do want to ask you about AI in particular, deep fakes and artists here.
So what are lawmakers doing right now?
What are we seeing in the industry?
Yeah, so, OK, AI is obviously top of mind in every business.
In our business, getting the right federal copyright protections for artists is critical right now.
So you have like the No Fakes Act, which is a bill before Congress, nurture originals, foster artists, keep enter same.
Keep entertainment safe and then you have the Generative AI Act.
And so what we want to do is really protect artists' likenesses and protect their voices, you know, the big issues are should companies like OpenAI and Chat GBT, should they be allowed to train their algorithms to sound like Taylor Swift and Beyonce?
And so it's the constant push and pull between technology and protecting intellectual.
Property.
Yeah, well, less than 60 seconds here, but what do you think this means long term here when we're talking about artists being protected and copyright?
So I think you're going to see some fundamental changes in the law today.
There's no federal copyright protection in your voice, if you can believe it, but you're seeing states now acting to protect.
So you have like the Elvis Act in Nashville, which makes it a crime to lift an artist's voice and pretend.
And then you saw deep fakes like the weak.
And and Drake and so there's going to be legislation around this.
All the companies are looking at it.
They're fighting Washington heavy about it.
So I'm hopeful that these bills get passed, you know, get signed into law because we need to protect the artists.
We need to protect the labels.
I mean that's the lifeblood of the industry.
If companies like Suno and Udio are going around just ripping off voices and creating.
You know, millions of songs that sound like popular artists.
I mean, that's going to dilute everybody who's creating beautiful music.
We can't let that happen.
Well, David, this is definitely a space that we'll keep our eyes on.
Thank you so much for simplifying and breaking it down for us.
Thank you.
Thank you.
