Ebene Magazine – Spotify has to sing every tune

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Ebene Magazine - Spotify has to sing every tune

Spotify

SPOT -4.03%

sees itself as much more than a music streaming platform. Investors have long since got there.

The company unveiled an ambitious vision during a two-hour webcast on Monday, promoting new and upcoming offers for listeners, musicians, podcasters and advertisers. These include a new high fidelity music streaming service for subscribers, more tools for musicians and podcasters to expand their revenue streams, and a significant international expansion that will see the service in 85 new markets this year. For podcasts that were of particular interest to investors, Spotify added a new series of eight episodes starring the former president

Barack Obama

and

Bruce Springsteen.

In other words, a news dump. And one that initially delighted investors, adding 5% to Spotify’s share price before a broad-based tech sell-off pushed stocks back into the red by Monday’s end of trading. Still up more than 11% year-to-date and 138% in the last 12 months, Spotify has other hot-streaming names such as:

Netflix

and

Disney.

Shares of

Warner Music Group,

The company, which as one of the world’s largest record labels controls some of the most sought-after pieces of music that Spotify subscribers listen to, has actually lost about 4% this year.

Opportunities beyond streaming music are currently for the Spotify investors are key. The big surge in the stock over the past year is largely due to the hype surrounding new podcast deals

Joe Rogan,

Kim Kardashian

and DC Comics. Even the royal family interferes; Prince Harry and

Meghan Markle

appeared briefly on Monday to promote its own exclusive Spotify podcast, which will be released later this year.

While the number of podcasts on Spotify tripled to 2.2 million last year, the company has no financial details of the company announced yet. The hugely popular « Joe Rogan Experience » became exclusive to Spotify on December 1st, but the company didn’t say it was « a positive contributor to user growth on the platform » as it was called in the fourth quarter of February 4th. In a note after the results,

Brian Russo

from

Credit Suisse

The company’s outlook for the current year « suggests little that this content is causing a flexion in business. »

Other new endeavors, such as providing more services to musicians and labels to attract and grow listeners , are at an even earlier – and less quantifiable – stage. But Spotify is now trading almost 6 times the futures contract, a record multiple that has also more than doubled in the past year. The company has definitely gained a fan base among investors who like to violate Wall Street’s professional advice: 39% of brokers now recommend the stock, compared to 62% a year ago, according to FactSet. However, given the time it will take for the latest efforts to bear fruit, Spotify better hopes these fans aren’t the fair-weather type.

Ref: https://www.wsj.com

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