The Exciting Future of Spotify
If you like music, you have probably heard of Spotify. You may even be one of the platform’s 286 million monthly active users (MAUs), or one of its 130 million premium subscribers.
Becoming a major player in the podcast space, Spotify (ticker: SPOT) saw its stock rise over 12% on June 18 after announcing an exclusive deal with Kim Kardashian-West on a criminal justice reform podcast, as well as Warner Bros. and DC Entertainment on originally-scripted series’s revolving around the DC franchise, Looney Tunes, “Supernatural,” and more.
These additions come on top of deals the company has closed within the past few years, including acquisitions of podcast platform Anchor, podcast networks Gimlet Media and Parcast, the website and podcast network of The Ringer, and, most recently, The Joe Rogan Experience.
Widely known as a top player in the music space, Spotify is out to fill your ear-holes in as many ways as possible.
In the release of its first-quarter financial report in April, Spotify stated that 19% of its monthly active users engage with podcast content, up from 16% in the prior quarter. These numbers were reported before the acquisition of The Joe Rogan Experience, which neared 200 million downloads over a year ago.
The company also stated that the platform features over a million podcasts, 60% of which are powered by Anchor.
Spotify set guidance for its second quarter (due for report July 29) as follows:
- 289–299 million monthly active users (Q120: 286 million)
- 133–138 million premium subscribers (Q120: 130 million)
- $1.96 billion-$2.18 billion revenue (Q120: $1.84 billion)
Spotify is still expecting to operate at a loss, which is not a surprise considering its recent spending spree.
While most use Spotify to listen to its music collection, its growing podcast network contains the true growth potential for the company.
From an investment standpoint, Spotify is a growth company, which represents some risk. It is unprofitable and is projecting to be so for the foreseeable future.
But the company’s consistent growth is a reason to feel good for the short and long term. They should continue to gain monthly active users, subscribers, and after its recent acquisitions, will surely see podcast content get more attention.
Spotify has made an expensive investment in podcasting and may not be done. As more exclusive content makes its way to Spotify, watch the stock soar alongside it.