spotify
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Spotify has launched a new AI playlist feature for premium users in the United Kingdom and Australia, the company revealed in a blog post on Sunday (April 7). The new feature, which is still in beta, allows Spotify users in those markets to turn any concept into a playlist by using prompts like “an indie […]
Shares of Spotify jumped 17.6% to $310.31 this week on a report that the streaming giant will raise prices again in select markets as well as news that it named a new CFO, Christian Luiga, a former CFO and deputy CEO at European defense and security company Saab AB.
Spotify’s newfound willingness to both raise prices and control costs has given new life to its stock price after an expensive entry into podcasting caused a downturn in 2022. Through Friday (April 5), shares of Spotify have increased 65.2% year to date and 134.2% over the past 12 months. Not even Believe, up 57.1% in 2024 thanks to competing interests to acquire the company, has matched Spotify’s momentum this year. Sphere Entertainment has also enjoyed a boost on Wall Street since U2’s inaugural residency at the $2.3-billion Las Vegas venue, but its 37.7% gain in 2024 also lags behind Spotify.
For more than a decade, Spotify kept its subscription prices low and emphasized subscriber growth over profits. The market’s mood has shifted in recent years, though. Once satisfied with growth in user numbers, investors now want high-flying streaming companies to be profitable, too. Since Spotify announced a price increase on July 24, 2023, the share price has increased 89.5% and raised the company’s market capitalization by roughly $29 billion to $61.5 billion. The share price has gone up 71.7% since Spotify announced it would cut 16% of its staff on Dec. 4, 2023.
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This week, investors reacted to a Bloomberg report that Spotify is raising subscription prices in select markets and will pass another rate hike in the United States later this year. Following the news, Spotify gained 8.2% to $291.77 on Wednesday (April 3). Labels appeared to benefit, too: Universal Music Group rose 5.5% and Warner Music Group gained 5.8% on Wednesday following news of the price increase.
Rather than shy away from price increases in successive years, Spotify could have a unique ability to withstand higher prices compared to its peers. Morgan Stanley analysts wrote in an investor note on Thursday (April 4) that music is “broadly under-monetized” and the quality of Spotify’s product gives it “unique pricing power.” Guggenheim analysts wrote in a report on Wednesday that they believe the price increase could mean a “9% revenue impact” in the affected markets.
What’s more, the higher prices could help Spotify by improving its audiobook business. Spotify now gives subscribers in the United States and some other markets 15 hours of free audiobook streaming per month; users can also purchase additional listening time and buy audiobooks to keep. A recent Morgan Stanley survey revealed Spotify was used by 38% of audiobook listeners, second only to veteran audiobook platform Audible despite Spotify having launched audiobooks only a few months before the survey. “Audiobooks appear to be perhaps a larger revenue opportunity than podcasting based on this survey works and long-standing consumer price points for books,” Morgan Stanley analysts wrote.
The Billboard Global Music Index dropped 0.2% to 1,748.38 as nine of the index’s 20 stocks were winners, 10 were losers and one was unchanged. No company other than Spotify posted a double-digit increase, however, and three companies — iHeartMedia, Cumulus Media and Anghami — had double-digit declines.
Stocks were mixed globally this week. In the United States, the Nasdaq composite dropped 0.8% to 16,248.52 and the S&P 500 fell 1.0% to 5,204.34. The United Kingdom’s FTSE 100 fell 0.5% to 7,911.16. China’s Shanghai Composite Index rose 0.9% to 3,069.30. South Korea’s KOSPI composite index lost 1.2% to 2,714.21.
Music streaming company Anghami (NASDAQ: ANGH) was the biggest loser of the week after dropping 41.1% — it lost 44.5% on Wednesday alone — after OSN Group, a premium entertainment provider for the Middle East-North Africa region, acquired a 55.45% stake. The deal, first announced in November 2023, combines the Abu Dhabi on-demand music streaming service with a paid, on-demand video streaming platform that carries both Arabic and Turkish titles and content from Western brands such as HBO, Universal Pictures and Paramount.
Spotify named Christian Luiga on Thursday (April 4) to be its new chief financial officer to replace Paul Vogel, who stepped down from the CFO role at the end of March. Luiga will be Spotify’s third CFO in five years, and he takes charge of financial planning and analysis amidst changes to how the streaming […]
Spotify will increase prices in five markets later this month and do the same in the U.S. later this year, Bloomberg reports. Spotify previously raised the price of premium individual plan by $1 in North and South America, Europe, and Asia last year.
The initial round of new price hikes — $1 a month for individuals, $2 a month for duos and families — will hit the U.K., Australia, and Pakistan, among others, according to Bloomberg.
A rep for Spotify declined to comment.
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In recent years, music rightsholders have regularly been calling for streaming services to raise prices. Appearing at a Morgan Stanley conference last year, Warner Music Group Robert Kyncl noted that the price of individual streaming subscription plans continued to lag behind inflation.
“We are the lowest (cost) form of entertainment,” Kyncl said of music. “We have the highest …engagement, highest form of affinity and lowest per hour price. That doesn’t seem right. It should change in an orderly fashion.”
Last year, Barclays estimated that a 10% price increase by all music subscription services would increase Universal Music Group’s revenue by $430 million and Warner Music Group’s revenue by $256 million.
Spotify moved to raise prices — $10.99 a month for individuals, $16.99 a month for families — in July of 2023. “The market landscape has continued to evolve since we launched,” the company wrote in a blog post. “So that we can keep innovating, we are changing our Premium prices across a number of markets around the world. These updates will help us continue to deliver value to fans and artists on our platform.”
Bloomberg also reported on Wednesday (April 3) that Spotify plans to introduce a new payment tier: $11 a month for individuals who only want access to music and podcasts. Those users will have to pay separately for audiobooks.
Spotify turned a profit in the third quarter of 2023, its first in a year. The company posted an operating loss of €75 million (around $80 million) in the fourth quarter. It now boasts more than 600 million users.
Spotify’s stock price is up about 5.5% ($284) in morning trading, following a brief spike of as much as 7.4%.
Frank Ocean‘s 2012 track “Lost” has found a new accomplishment 12 years after its release: It recently hit 1 billion streams on Spotify. This marks Ocean’s third song to reach this milestone, following Calvin Harris‘ “Slide,” also featuring Migos, and “Pink + White.” “Lost” was the fourth single from his debut studio album Channel Orange, […]
It’s been less than a day since Beyoncé finally dropped her Cowboy Carter album, and the project is already breaking records. The album is officially Spotify’s most-streamed album in a single day in 2024, the streaming service announced on Friday (March 29). This is the first time a country-album holds the title this year. Before […]
Universal Music Group announced on Thursday (March 28) that its artists will soon have the ability to tease unreleased music on Spotify.
Sharing snippets of unreleased songs on social media has been one of the most popular promotional methods for artists during the TikTok era (sometimes to the chagrin of songwriters). In many instances, artists haven’t even finished writing the song that they tease. But fan enthusiasm can make these scraps of music go viral anyway, especially on TikTok, sending artists scrambling to write another verse, record a full song, and release it as soon as possible — hopefully to a rapturous reception.
The Universal Music Group announcement is notable because it comes as the company’s stand-off with TikTok nears the end of its second month. Official recordings of UMG acts are not currently available on the app. (Same goes for many, but not all, songs that feature contributions from UMPG songwriters.) While most UMG artists continue to use the app as a social tool to communicate with their followers, their ability to promote their music on TikTok is severely limited.
Teasing songs on Spotify represents a potential alternative for these acts. “We’re excited to broaden our relationship with Spotify through the introduction of new content offerings and collaborations that will bring deeper ‘social music’ experiences to the platform,” UMG chairman and CEO Lucian Grainge said in a statement.
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Spotify founder and CEO Daniel Ek added that “the forthcoming features will put more power in the hands of artists and their teams to help them authentically express themselves, efficiently promote their work, and better monetize their art.”
UMG did not say when its artists would be able to start sharing pre-release snippets on the platform. It’s also not clear the extent to which Spotify users will actively hunt for pre-release music on the streaming service — many prefer more passive forms of engagement.
TikTok, in contrast, excels at engaging those who see fandom as a participatory sport — they want to comment on unreleased demos and make their own remixes. And for younger listeners especially, the app is often a popular source of music discovery.
Midia Research found that TikTok is the second biggest driver of music discovery for Gen Z after YouTube. U.S. TikTokers “are nearly twice as likely to discover music on short-form video platforms than the average user of social or social-form video platforms,” according to a Luminate study released in November.
Spotify is then where many of these listeners go and listen to full songs they found on TikTok. To make this process even more friction-less, TikTok launched a new feature last year that allows users to quickly save music they find on the platform to Spotify and other streaming services.
But Spotify executives have been eager to tout the streamer’s ability to drive discovery on its own. “There’s a disconnect between where music is being teased and where music is actually being streamed,” Sulinna Ong, Spotify’s global head of editorial, said at the company’s Stream On event in 2023. “The most powerful time to reach fans is when they’ve chosen to engage with music, like when they open up Spotify.”
At the same event, Spotify co-president Gustav Soderstrom said that “Spotify recommendations drive close to half of all user streams.” “Each time your music gets played on a playlist like Release Radar, you receive, on average, three times more streams from that listener over the next six months,” he added. “And when a listener decides to follow you, they listen to, on average, five times more of your music.” This recommendation system sets Spotify apart from platforms that deliver “just a fleeting moment of viral fame.”
UMG also announced on Thursday that its publishing arm inked a deal with Spotify so the platform can share music videos in the U.S. Spotify music videos launched in beta for premium users in 11 countries — but not in the U.S. — earlier in March. At the time, Charlie Hellman, Spotify’s vp and head of music product, called videos “an important part of so many artists’ tool kits.
“It’s a natural fit for them to live in the same place that more than half a billion people choose to listen to music,” Hellman added in a statement.
Ariana Grande is the latest singer-songwriter to get her own “Written By” playlist on Spotify. The playlist includes Grande’s biggest hits, including “7 Rings,” “Thank U Next,” “Dangerous Woman” and “we can’t be friends (wait for your love,)” as well as songs she has written for other artists. The playlist shines a light on Grande’s talents in […]
Spotify has launched a new experiment, offering educational video courses to its U.K. users on subjects including music making, creativity, business and healthy living. The new courses show that Spotify is hoping to expand its reach beyond music, podcasts and audiobooks into a new fourth vertical, but the launch is still in the testing phase.
The videos are provided through partnerships with BBC Maestro, Skillshare, Thinkific and PlayVirtuoso and are available on Spotify’s desktop and mobile apps. They can be found by clicking a new ovular icon at the top of the screen. Two lessons in each course are freely available to both free and premium subscribers, but to access a full course, users must leave the app and purchase additional lessons on a dedicated web page to continue. Spotify will receive a commission on whatever is sold through its platform, according to The Verge.
“Testing video courses in the U.K. allows us to explore an exciting opportunity to better serve the needs of our users who have an active interest in learning,” said Babar Zafar, vp of product development at Spotify, in a blog post announcing the test. “Many of our users engage with podcasts and audiobooks on a daily basis for their learning needs, and we believe this highly engaged community will be interested in accessing and purchasing quality content from video course creators. At Spotify, we’re constantly striving to create new offerings for our creators and users, and having built best-in-class personalized music and podcast offerings, we look forward to exploring the potential of video-based learning on Spotify.”
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The post notes that roughly half of Spotify premium subscribers have engaged with education or self-help-themed podcasts.
Spotify did not immediately return Billboard’s request for more information on whether it’s planning to expand the test to other markets, including the United States.
Daniel Ek, CEO/founder of Spotify, hinted at the company’s interest in expanding into education nearly two years ago during his Spotify Investor Day presentation held on June 8, 2022. “We will firmly cement Spotify as the home for some of the greatest artists and creators and educators in the world,” he said at the time. “I’m not aware of any other company has been successful in taking a multi-business model and multi-vertical approach within one user experience.”
This U.K. test proves that Spotify is still searching for profitability and keen to expand its user base beyond what music streaming can provide. According to MIDiA Research, growth in music streaming subscriptions is expected to slow from double- to single-digits in the coming decade as the market reaches maturity. Plus, the margins made from music streaming continue to be tight.
Alex Noström, Spotify’s co-president/chief business officer, has also hinted at the company’s educational focus in the past, saying at the 2022 investor day presentation: “In the next 10 years, there are additional markets and verticals that we believe are natural fits for our platform and audience…There’s news, sports and education. Those are vast markets [that] we can imagine Spotify playing in… [All] are big consumer markets, sometimes much bigger than music… We have an opportunity to consolidate user’s habits and purchases to Spotify and also expand the pie allowing broader and more convenient access to these new content carrier categories.”
Music stocks’ performance this week was a microcosm of the entertainment industry this decade, with streaming companies making up the top four performers while legacy broadcasting stocks finished at the bottom of the heap.
Chinese music streaming company Tencent Music Entertainment rose 6.0% to $10.95 following the company’s encouraging full-year earnings results on Tuesday (Mar. 19). Although total revenue declined 2.1%, the online music part of the business is booming. Subscription revenue from QQ Music, Kuwo Music and Kugou Music increased 39.1% to $1.7 billion while the number of subscribers grew by 18.2 million to 106.7 million. Tencent Music shares reached a 52-week high of $11.80 on Thursday (Mar. 21) but dropped 4% on Friday (Mar. 22) following news that Zhenyu Xie, president/chief technology officer, tendered his resignation. Xie will be replaced on the board of directors by CFO Shirley Hu.
Spotify gained 3.9% to $264.95, bringing its year-to-date improvement to 41.0%. On Tuesday, the streaming company released its fourth annual Loud & Clear report, a breakdown of the prior year’s royalty payouts. In 2023, the number of artists who received at least $10,000 from Spotify increased 16% to 66,000 — 2.7 times more than the number who received that much in 2017. The number of artists who earned $1 million or more from Spotify rose 18% to 1,250.
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Two smaller companies posted even larger gains. Anghami shares rocketed 56.8% to $1.74 this week and reached as high as $2.20 after a regulatory filing revealed that Saudi media company MBC Group had amassed nearly a 14% stake in the Abu Dhabi-based music streamer. The investment helped give Anghami some breathing room after the Nasdaq warned in October that the stock faced delisting for closing under $1 for the prior 30 days. Anghami closed below $1 from Feb. 1 to Mar. 7 but has closed above $1 since Mar. 15.
LiveOne jumped 10.9% to $2.04 after announcing on Monday (Mar. 18) that it expects record quarterly revenue with the help of increased Tesla sales, 30 new podcasts and more than $2 million in monthly recurring revenue from clients in its B2B streaming business. Additionally, the company revealed that it repurchased $250,000 worth of stock in the previous 30 days and extinguished $3 million of payables of PodcastOne, the podcast company it spun off in September 2023.
Streaming companies’ gains helped the Billboard Global Music Index rise 1.3% to a record 1,719.66 this week, breaking a two-week skid and topping the previous record of 1,715.81 set the week ended Mar. 1. The 20-company index had an even number of winners and losers.
Major indexes rose to new heights after the U.S. Federal Reserve indicated the central bank still expected three interest rate cuts in 2024 despite a recent increase in inflation. In the United States, the Nasdaq composite rose 2.9% to 16,428.82, a new closing high, and reached an intraday high on Thursday. The S&P 500 finished the week up 2.3% to 5,234.18, even after falling 0.1% on Friday. In the United Kingdom, the FTSE 100 gained 2.6% to 7,930.92. South Korea’s KOSPI composite index rose 3.1% to 2,748.56. China’s Shanghai Composite Index fell 0.2% to 3,048.03.
Broadcasters were at the opposite end of the spectrum. The index’s biggest decliner was iHeartMedia, which fell 7.7% to $1.91. After a sluggish year for national advertising, iHeartMedia executives have predicted 2024 will be “a recovery year” and first-quarter revenue decline will be less severe than previous quarters. Maybe so, but investors have dropped its stock 28.5% year to date.
Two other radio companies were among the bottom four stocks. Cumulus Media shares fell 6.6% to $3.41 and are down 35.9% in the first 12 weeks of the year. Cumulus’ revenue was down 11.4% in 2023, and CEO Mary Berner warned investors in February that “choppy” ad demand limited its ability to forecast in 2024.
SiriusXM, which is optimistic about its redesigned streaming app, dropped 4.2% to $3.88 and has fallen 29.1% this year. Liberty Media, which owns 84% of SiriusXM’s outstanding shares, plans to merge the SiriusXM stock with the Liberty SiriusXM track stock later this year.