Investment bank Bernstein stated that super fans can be found across different media and are crucial for the next phase of growth and profitability in the Industry.
According to Zhito Finance APP, investment bank Bernstein stated that super fans—such as Beyoncé's fans the Beyhive, Taylor Swift's fans the Swifties, and Ferrari fans—can be found across different media, and they are crucial for the next phase of growth and profitability in the entertainment Industry. Analyst Ian Moore pointed out in a report: 'The ability to effectively attract and monetize super fans will be a core driving factor and key differentiator determining the growth and profitability of the Industry.'
Ian Moore has started covering the entertainment Industry, giving 'outperform' ratings to Live Nation Entertainment (LYV.US), Spotify Technology (SPOT.US), TKO Group Holdings (TKO.US), DraftKings (DKNG.US), and Warner Music (WMG.US), and 'market perform' ratings to Liberty Formula One (FWONK.US) and Flutter Entertainment (FLUT.US).
Since the end of the pandemic, demand for live events and other experiences has been driven by the mindset of 'FOMO (fear of missing out)' and 'YOLO (you only live once)'. A series of events held last summer in Europe—including Taylor Swift's 'Eras' world tour—led Bernstein to anticipate that hotel groups and travel agencies will benefit from this.
So, what is a super fan? Ian Moore stated that they typically come from high-income or wealthy groups and are less sensitive to price increases, maintaining stable consumption habits even during economic recessions. Although focusing on super fans may slow the growth of regular fans, Ian Moore expects that companies leading in attracting super fans will significantly enhance profitability.
Ian Moore stated: 'Super fans manifest in different forms across sub-sectors such as live experiences, music, online sports betting (OSB), and iGaming, but they are all central to our growth expectations over the next three to five years. Growth driven by super fans will continue for years to come.'
Among them, Live Nation is listed by Ian Moore as the 'best choice'. Data shows that the stock price has rebounded from its low in April, outperforming the S&P 500 Index. The stock rose 2.6% on Wednesday. Meanwhile, Spotify's stock price rose 4.5% on Wednesday, reaching an all-time high.
Ian Moore set a target price of $185 for Live Nation, which is the highest target price given by the analysts tracked by Bloomberg. The Analyst believes that Ticketmaster, the ticketing giant under Live Nation Entertainment, has room for growth in sales, sponsorship income, and concert profit margins. Additionally, the Analyst stated that public and political criticism of Live Nation and Ticketmaster is "temporary" and that the likelihood of the U.S. Department of Justice making an unfavorable ruling against Live Nation in the antitrust case is "very low." The Analyst does not believe that the United Kingdom's Competition and Markets Authority (CMA) investigation into dynamic pricing will have a substantial impact on Live Nation.
The Analyst added: "We believe that the industry's recent shift towards 'all-in pricing', President Trump's executive order on 'BOT attacks', and the dismissal of monopoly allegations against artists all indicate that regulatory focus is shifting from the 'primary ticketing market' to the 'secondary ticketing market'."
Moreover, Ian Moore has set a target price of $825 for Spotify, which is also the highest target price given on Wall Street. The Analyst pointed out that the pricing power of this music streaming company is "underrated." Additionally, the company's upcoming superfan subscription service will be a major growth catalyst. Once the superfan subscription service is launched, it will "quickly gain adoption from existing and potential new users" and "strongly drive Spotify's gross margin to the higher end of the 20% range, with long-term gross margins exceeding 40%."
