![]() ![]() “To date, we have not seen a material positive inflection in app downloads or Premium subscriptions,” the Citi analysts said. ![]() It’s far too early to come to any firm conclusions, but the Spotify case is concerning.įriday, shares of Spotify took a hit after Citi analysts downgraded its stock, saying they have not seen “a material positive inflection in app downloads or Premium subscriptions” from Spotify’s $800 million-plus investment into the podcast medium.Ĭiti cut its rating of Spotify’s stock from “neutral” to “sell,” explaining that “the cadence of Premium gross additions (through 3Q20) and app download data (through 4Q20) do not show any material benefit from recent podcast investments (that began in 2019).”Īnalysts fear 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.” Adding it would be problematic for Spotify’s multiple and equity value.Īccording to CNBC, Spotify believed that by bringing in exclusive content - which includes Joe Rogan, Kim Kardashian West, Michelle Obama, and the Duke and Duchess of Sussex - that its advertising business would strengthen and the number of premium subscribers would increase, but that doesn’t seem to be the case. The fear all along was that the checks would be large but that the results would be underwhelming. The inevitable dominion effect is already underway with digital media brands expanding and radio hosts pivoting to podcasting. Joe Rogan cashed in for $100 million in a licensing deal with Spotify, Spotify struck a $200 million to acquire The Ringer and its podcast network, and Barstool’s multi-media brand received a $450 million valuation. The podcasting industry was one of the few bright spots of the pandemic-ridden 2020. ![]()
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