Author Topic: SPOT - Spotify  (Read 13291 times)

ajc

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Re: SPOT - Spotify
« Reply #30 on: February 06, 2019, 04:46:22 AM »


Q4 highlights:


- OI, NI, FCF all simultaneously positive for 1st time in company history
- Total MAUs up 29% YoY
- Premium subscribers up 36% YoY
- Total revenue up 30% YoY
- Gross margin up to 26.7%
- Net cash flows from operating activities up 58% YoY
- 1.8B euros in cash and short-term investments


https://s22.q4cdn.com/540910603/files/doc_financials/quarterly/2018/q4/Shareholder-Letter-Q4-2018.pdf




Also, Ek's post on the Gimlet and Anchor podcast acquisitions is a good read.
Contains interesting insights about user behavior and how Spotify views the overall industry.

https://newsroom.spotify.com/2019-02-06/audio-first/




Spekulatius

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Re: SPOT - Spotify
« Reply #31 on: February 06, 2019, 07:37:22 AM »
WHO is EK? I get the idea that SPOT could become a nice business some day, but ~$25B is a lot to pay for ”could”. I get the idea to buy FB and GOOG for 20 x earnings. I’d rather deal with crappy headlines than crappy financials. SPOT is parked on my watch list right now.
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glorysk87

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Re: SPOT - Spotify
« Reply #32 on: February 06, 2019, 10:39:05 AM »
WHO is EK?

Can't tell if you're serious or not, but it's Daniel Ek the co-founder and CEO of Spotify

Spekulatius

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Re: SPOT - Spotify
« Reply #33 on: February 06, 2019, 04:00:02 PM »
WHO is EK?

Can't tell if you're serious or not, but it's Daniel Ek the co-founder and CEO of Spotify
‍‍‍
Ouch, thanks I missed that. Thought EK is a shorthand for something, but of course it’s a Swedish name.
« Last Edit: February 06, 2019, 04:03:08 PM by Spekulatius »
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Liberty

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Re: SPOT - Spotify
« Reply #34 on: February 07, 2019, 08:34:35 AM »
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chesko182

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Re: SPOT - Spotify
« Reply #35 on: February 07, 2019, 09:04:52 AM »
A great post, as usual.

A not-so-crazy-idea now (pure speculating): Spotify buys a meditation-app (or develops its own...).

Fits the audio company strategy, fixed-cost structure, lowers churn, increases LTV etc.

Anyone seen anything related to reactions of the labels to this new strategy?
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Jurgis

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Re: SPOT - Spotify
« Reply #36 on: February 07, 2019, 12:03:40 PM »
I guess $1M questions are:

- How big is the podcast market going forward? Ek said going to 20%+ of Spotify listening. Is that reasonable and achievable?
- What is the probability of Spotify capturing that ??% of total podcasting that would map to 20%+ of Spotify listening?
- Assuming they get to 20%+ of Spotify listening. Is that enough to drive monetization/profits assuming no improvement on music side?
- Assuming they get to 20%+ of Spotify listening, will that improve Spotify's position vs music labels/artists and music side of business overall?

Let me throw out a simple silly model: assume current annual revenue $7B, podcasting adding 20% revenue ($1.4B), all that flowing to income/CF at 100% margin, you have $1.4B income/CF at $25B market cap - looks cheapish. Especially since regular revenue may grow double digits itself. The optimistic parts of this model are 20% rev addition and 100% margin though. Assuming 50% margin, the valuation becomes less attractive.

With 207M MAUs, it's possibly somewhat realistic to add 20-40M MAUs if they can grab a large podcast slice?
« Last Edit: February 07, 2019, 12:05:33 PM by Jurgis »
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voyager

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Re: SPOT - Spotify
« Reply #38 on: February 22, 2019, 08:51:16 AM »
I have a little bit of knowledge here in the podcasting space and can offer a few thoughts.

1) For info on the industry check out Edison's Share of Ear report.  They also do podcast specific research as well.  It's very good and used by the industry.  Long story short, podcasting is growing fast, albeit the industry is still small ~$300 million doesn't monetize super well yet, and is a big opportunity for Spotify.
2) What Spotify is really good at is discovery... This is a skill that is much needed with podcasts.  They think one way to do it is to have exclusive content, although one should expect them to have outside content as well. 
3) The unit economics are probably better than music for podcasting since there are less middle men.
4) Strategically, it's a way for them to have an edge over Apple, who is their big competitor.  Additionally, people don't use streaming very much when in the car.  Podcasts are really catching on in the car and if Spotify can leverage that to get more people to use their app in the car - even by a couple percent - that's a huge value to them. 

The Stratechery article is great as well. 

ajc

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Re: SPOT - Spotify
« Reply #39 on: February 27, 2019, 05:10:55 AM »

Spotify has launched in India (https://techcrunch.com/2019/02/26/spotify-launches-in-india/).

Won't help their ARPU numbers, but in all likelihood will provide a strong boost to their MAU stats judging from the response on Twitter India yesterday.
Anyway I think they're focused on the right thing for now, which is user scale over revenue.

Back to Twitter India... people seemed unanimously crazy about the launch news as I saw it develop, and a few were openly dissing Apple, JioSaavn, and Gaana, saying they couldn't wait to delete those accounts.

Clearly it's too early to tell what market share Spotify will grab, but I think it's safe to say the early signs look relatively promising.