The world’s largest record label Universal Music (UMG) is due to list on Euronext Amsterdam today, as its owner Vivendi (VIV.PA) spins off a 60% stake, hoping for over a $39 billion valuation. “The music streaming boom has allowed the industry to rise from the ashes and now near the revenues of 20 years ago (see chart below). A strong IPO would boost UMG owner, investors, competitors, and potentially broader streaming, radio, and live entertainment stocks,” Ben Laidler, global market strategist at multi-asset investing platform eToro, comments.

Global recorded music revenue was $21 billion last year, with streaming 62% of that, per the International Federation of Phonographic Industry (IFPI). Industry revenues grew a fast 7.4% and streaming 18.5%. “Streaming growth is increasingly from emerging markets, at a lower price, whilst revenue sources broadening to video gaming, fitness apps, and social media. This likely offsets some of biggest acts increasingly going direct, without a label,” Laidler explains.

He adds that a big UMG market valuation would help owner Vivendi, investors like struggling Tencent Music (TME), and competitors like no. 2 Sony Music parent Sony (SONY) - music only 10% revenues - and recently listed no. 3 pure-play Warner Music (WMG). “A strong sector outlook also helps largest streamer Spotify (SPOT), which with Apple Music pays 2/3 sales to labels; concert promoter and Ticketmaster owner Live Nation (LYV); satellite radio and Pandora owner Sirius (SIRI); speaker maker Sonos (SONO); US radio station iHeart (IHRT),” Laidler says.