AGB 2021.17 - Spotify (SPOT)

Future Returns Depend on Podcasting Success

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Spotify

Disclaimer: There are many other write-ups on Spotify that go into much more detail about the business and industry than we have here. The purpose of this write-up (and all the others on AGB) is to analyze whether the company has a sustainable competitive advantage, is generating high returns on incremental capital invested and has a long runway for reinvestment. Also, we won’t go into the nuances of music royalties and how much artists and labels make. If you’re interested, Sleepwell Capital wrote a wonderful piece covering this exact subject earlier this year.

Spotify is the leading audio streaming provider with over 70M tracks (including 2.9M podcasts) available on the platform in 178 markets. The company provides audio listening services to over 365m monthly active users (MAUs), including 165m premium users, on almost every connected device including smartphones, tablets, smart speakers, watches, TVs, videoga…