Spotify Hires TV Producer Dawn Ostroff: What It Means For Investors

Streaming music provider Spotify Technology SA (NYSE: SPOT) named notable producer Dawn Ostroff as its new chief content officer. If anything, the move signals Spotify's recommitment to original video content, according to Wells Fargo.

The Analyst

Wells Fargo's Peter Stabler maintains a Market Perform rating on Spotify's stock with an unchanged $150 price target.

The Thesis

TV and film producer Ostroff, who comes to Spotify from Conde Nast Entertainment, is best-known for developing the hit series "Gossip Girl" and "One Tree Hill" and developed the reality show "America's Next Top Model," Stabler said in a research report. (See the analyst's track record here.) 

At Spotify, Ostroff will oversee all content partnerships in both music and video and replaces Stefan Blum, who dabbled in original video content but failed to generate any significant user traction, the analyst said. 

Checks and conversations with Wells Fargo's industry contacts suggest Ostroff "largely eschewed development" of live events or streaming video assets, Stabler said. Her appointment to Spotify's leadership team is a "logical move," as Spotify remains interested in original video content, he said. 

While Ostroff's prior jobs came with large production budgets, it would be incorrect for investors to assume Spotify is looking to compete in the "super-premium video arms race," Stabler said. 

Price Action

Spotify shares were trading up 2.86 percent to $181 at the time of publication Wednesday morning. 

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Photo courtesy of Spotify.