Apple Pauses Spotify ▶

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Apple Pauses Spotify

It’s all hands on deck for investors in music streamer Spotify, as profitability continues to prove elusive and patience runs thin. With hope pinned on original podcasts coming to the rescue, rumors of Apple dipping into that market has got investors holding their breath for Spotify.

With interest rates low and business booming, locating the funds to keep an unprofitable business going isn’t a challenge. Spotify found a huge war chest in the money raised from a public offering in 2018, but investors didn’t just buy in for the tunes. Money talks, and the market wants some fundamentals behind the stock.

It doesn’t happen overnight, however. Spotify pulls in revenue from advertisers, and the Premium versions of the app which exempt you from those ads. As margins tighten, Spotify’s plan has been to buy up as many podcasts as it can afford. CEO Dan Ek revealed podcasts worth between $400 and $500 million dollars had been snapped up, the hope being that as a “Netflix of audio,” the app generates more engagement and appeal. But stop, Apple time!

Apple are in podcasts for different reasons. A growing podcast app doesn’t bear the weight of expectations to turnover profit like Spotify does, because it’s only there to make iPhone users more reluctant to switch from the iPhone. Genius, eh? And it’s got market watchers concerned about Spotify. Commuters and casual listeners need to be under its spell, or sentiment could take a swing.

For now, both stocks are in good health, but we’ll keep an eye on them!

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