Spotify Plays Moneytalks on Repeat 🎵

Spotify Plays Moneytalks on Repeat

Spotify has started the year on a flat note, and investors are singing the same old tunes. ‘I Need a Dollar’ by Aloe Blacc, Jay-Z’s ‘Hard Knock Life’, and ‘Ain’t Nothing Going On But The Rent!’ 

Spotify never intended to be a non-profit, but that’s the way things have turned out. The music streamer generates $6.1 billion each year through ads and premium account upgrades. However, most of that becomes royalties for record labels.

Shares have gone nowhere since their direct listing in 2018, and investors’ patience is running thin. After all, it doesn’t matter if you’ve revolutionized an industry. If can’t print black numbers, there’s not a space for you (Darwin et al., 1859). Eventually, investors will price that in.

Luckily, the Swedish tech giant has come up with a new plan to make money! Since music became institutionalised, extra-large checks have been written to market songs and place albums on billboards, television, and radio. It’s a cost of doing business, and now Spotify thinks it has the online real estate to compete for some of those marketing dollars.

The Stockholm-based company has ploughed hundreds of millions into podcasts which now compete for listeners’ time. There’s more pressure on publishers, and industry experts see a keen interest from artists in front-page placement. Watch out for an arms race between mega labels, all bidding for big exposure on behalf of those clients.

This kind of monetization potential could quickly get the stock surging. However, investors know Spotify’s past all too well. They’re expecting industry pushback. A bidding war would price out smaller Indy labels, and artists like Taylor Swift have already taken to the courts for royalty protection.

The Invstr community is 8% short-sold on the name, slightly less than the rest of Wall Street. Spotify has some convincing to do yet, but we’re listening!

Share:

More Posts

Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visa® Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community.The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results.Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such.Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.