They offer discounts to students, customized playlists, and even partner with other media giants, such as Showtime, on projects.įor a small fee, users can upgrade to the Spotify premium service, including the Spotify family plan. Basic users will experience advertisements between songs and do not get to directly choose songs when using the mobile application. Spotify operates under a “freemium” framework, meaning that about 35 million songs are free to its users. A Strategy for Adding Spotify to Your Portfolio.Spotify also had inked multiyear podcast pacts with the Obamas and Prince Harry and Meghan Markle’s Archewell Audio, as well as development deals with Kim Kardashian West, Warner Bros. Last fall, it secured exclusive rights to “The Joe Rogan Experience,” the hugely popular and controversial show.
It has also spent millions on original and exclusive podcast content. Last year Spotify bought Bill Simmons’ The Ringer podcast and media startup in a deal worth up to nearly $200 million and spent $235 million in cash to buy podcast publishing and ad company Megaphone.
Spotify kicked off its podcast-growth initiative in early 2019, buying podcast studios Gimlet Media and Parcast, and podcast self-publishing platform Anchor - paying nearly $400 million for them, with additional potential payouts over four years. Spotify hosts more than 1.9 million podcast titles, most of which are nonexclusive. Spotify as of the end of September had more than 320 million users, including 144 million paid subscribers, across 92 markets.
However, it’s not clear that would present a competitive threat to Spotify any greater than Apple Music already poses. Meanwhile, Apple execs have been “discussing” a potential podcast subscription service, the Information reported Friday, citing unnamed sources. And, that would be bad for Spotify’s multiple and equity value.” Spotify has a market cap of more than $60 billion, while it has continued to post operating losses. The Citi analysts wrote that “our fear is that if podcasting doesn’t provide a way for Spotify to shift away from music label dependence, the Street may reassess the underlying value of the business.
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