Category: Spotify Meltdown
Artist Rights Alliance brings the real numbers on Spotify Wrapped
And don’t forget the $2 billion in stock buybacks.
@alliecanal8193: Spotify CEO admits he got ‘carried away’ investing, will rein in spending this year
[Editor Charlie sez: There are no words for the arrogance.]
Speaking on the company’s fourth quarter earnings call, Ek said certain mistakes were made after the company heavily invested in high-growth areas like podcasts, telling investors: “I probably got a little carried away and over-invested.”
Ek, who called out a shaky macroeconomic environment, emphasized the company will be tightening investments in 2023 across the board as the music streaming giant doubles down on streamlining efficiencies “with greater intensity.”
@alliecanal8193: Spotify not raising prices reveals ‘competitive weakness’: Analyst
[Editor Charlie sez: For the impact on streaming royalties, read the background on MusicTech.Solutions: The Elusive Obelus: Streaming’s Problem With Denominators]
Spotify’s (SPOT) decision not to raise prices on its U.S.-based premium subscription plan speaks volumes about the music streaming giant’s lack of pricing power. At least according to one bearish analyst.
“[It’s] a strategic play. It speaks to the relative competitive weakness of their business compared to these bigger firms that have bigger, larger platforms that bring a lot more to the table,” New Constructs CEO David Trainer told Yahoo Finance Live, referring to recent price hikes from both Apple Music (AAPL) and YouTube Premium (GOOGL)….
Spotify stock, which lost more than two-thirds of its value in 2022, surged more than 12% on Tuesday following the company’s report. The stock is down more than 65% compared to its February 2021 record high.
“There’s a disconnect here between valuation and the underlying economics and fundamentals of the business,” Trainer said. “[Spotify] is an unprofitable business that’s been burning through a lot of cash.”