SPOT:US | SPOTIFY

Spotify is the global leader in music streaming with a 35% market share. It has around 180m paid subscribers, 2x the size of its nearest competitor Apple Music. Despite many tailwinds, Spotify has never turned a full year profit because it has to pay out 2/3 of every dollar to rightsholders. To loosen the major labels’ grip on economics the exceptional founder-led management currently pushes into new adjacencies (especially podcasting), which should open up a $18 bn market opportunity by 2030 with 45-50% gross margin potential compared to <30% for the core business. In my opinion this may transform Spotify into a sustainably profitable business.

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