Textual content measurement
Shares of streaming music service Spotify fell Monday as traders grew nervous a few report suggesting that
was getting ready to launch a free, ad-supported music service.
(SPOT) inventory, up roughly 20% in 2019, was not too long ago down three.eight% to $139.50 following the publication of a Friday story by Billboard that stated the Amazon music launch may occur this week. Amazon shares have been buying and selling primarily flat Monday afternoon, at $1,841.
Amazon (AMZN) didn’t reply to Barron’s request for remark in time for publication; a Spotify spokeswoman declined to remark. Some particulars have been unclear, amongst them whether or not the brand new Amazon service could be marketed past Amazon’s Echo audio system.
Amazon’s Prime Music gives two million a la carte songs to subscribers of its Prime service. Its Music Limitless has a a lot larger library for an $eight month-to-month charge. Spotify, in the meantime, has a $10 premium product, in addition to an ad-supported free tier seen as a subscription funnel.
(Amazon-related competitors can be weighing on shares of
(SFIX)—we lined that story this morning.)
For Spotify, the Amazon information comes amid considerations that it’d get squeezed by the charges it pays artists—in addition to aggressive pressures not solely from Amazon, however from
(AAPL), which in keeping with experiences not too long ago managed to high Spotify’s U.S. paying subscriber depend.
Spotify has begun pushing again towards what it sees as anticompetitive practices at Apple’s app retailer.
In a word to purchasers on Monday, Raymond James analyst Aaron Kessler supplied some context on Amazon’s aggressive risk to Spotify:
“As with every motion by a big know-how firm, Spotify is buying and selling down on the information. We might stress, nonetheless, that 1) Amazon lacks penetration on smartphones, the first listening machine, and a pair of) Amazon’s companies have restricted traction internationally. Briefly, a brand new service would make the U.S. extra aggressive however have comparatively little impression to the 70%+ of Spotify’s customers positioned internationally.”
Spotify’s inventory bought a lift final month after experiences of a powerful launch of its India product. The corporate’s annual assembly is Thursday, and its subsequent quarterly monetary outcomes are anticipated in Could.
E-mail David Marino-Nachison at email@example.com. Comply with him at @marinonachison and comply with Barron’s Subsequent at @barronsnext.