Today we are going to talk about the popular streaming audio platform Spotify and bring you the most exciting news from this Swedish company. What changes are coming in the online service, what is happening with the company’s shares and what ambitions did the founder of Spotify share on Twitter?
Spotify launches paid podcast subscriptions
On April 23, the Wall Street Journal reported that online streaming audio service Spotify is planning – some sources are talking about the coming days – to launch paid podcast subscriptions.
Podcast creators will be able to set the cost of the subscription themselves without paying the platform any transaction fees. Very democratic! However, as noted by many analysts, the company was pushed to such a step by the news that in May this year Apple is implementing an identical feature in its podcast service.
As a reminder, unlike Spotify, Apple will charge podcasters $ 19.99 as an annual subscription fee and 30% of the sale of subscriptions as transaction fees.
Spotify and the US Podcast Market
According to Edison Research and Triton Digital, cited in their WSJ article, in 2021 the size of the American podcast advertising market will surpass the $ 1 billion mark, and the number of Americans listening to podcasts will exceed 116 million. Thank you, pandemic and quarantine!
Spotify Technology has invested huge budgets and efforts over the years to develop its platform. What is the purchase of the podcast resources Gimlet Media and Ringer and contracts with Joe Rogan, Michelle Obama and Barack Obama, Kim Kardashian, and Prince Harry Windsor and Meghan Markle.
Today, the Swedish audio streaming platform boasts an audience of 150 million, which is 2.5 times more than Apple’s statistics, and more than 2.2 million podcasts, which is almost 5 times more than in 2019.
Spotify shares jump 7%
On April 23, after the publication of the WSJ material, the value of Spotify Technology (NYSE: SPOT) securities increased by 7.15%, from $ 265.16 to $ 284.11. If we consider the dynamics of quotations for four months of this year, it is worth noting that the shares lost 9.7% in price.
Some experts attribute the appreciation of Spotify shares to the fact that investment company Jefferies raised its target price for the shares of the streaming platform to $ 360 and changed the rating of the shares to Buy.
According to Andrew Uerkwitz, an analyst at Jefferies, the Swedish online resource can become the main audio platform in the world and in comparison with competitors has an underestimated value of securities.
Summing up the result
On Friday, Spotify shares on the New York Stock Exchange gained 7.15%. And there may be several reasons for this. First, the WSJ announced that the popular Swedish online audio streaming platform is launching paid podcast subscriptions and providing podcast players with highly beneficial and flexible terms of cooperation.
Second, investment firm Jefferies raised its target price for the firm’s shares and changed its rating to Buy. Third, Daniel Ek, CEO and founder of the streaming audio service, tweeted that he was ready to buy London-based football club Arsenal, which Forbes has valued at $ 2.8 billion.
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