Can Spotify keep topping the chart?

published 9 May 2019

Spotify has hit its 100-millionth paying subscriber, but it will "have to change its tune" if it is to retain the title as the world's biggest paid music streaming platform, says The Observer. Revenue at the New York-listed Swedish business jumped by a third year-on-year in the first quarter to €1.5bn, although it still made a loss of €142m.

Paying subscribers are Spotify's main revenue source, with a £9.99 per month plan granting access to a library of about 40 million songs, says Simon Duke in The Times.

Spotify has played a vital role in "reviving the fortunes of the music industry in the digital era", says The Observer. Yet it is now a "victim of its own success". Major record labels such as Sony and Universal are squeezing it for ever more fees in return for licensing deals. Deep-pocketed Google and Amazon are rolling out their own free music services. Management has responded with a €358m acquisition binge as it seeks to branch out into podcasts. It also wants to imitate Netflix by owning some of its own content.

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Don't be fooled by the underdog pose, says Lionel Laurent on Bloomberg. Spotify is "no angel". It is still twice the size of the number two player, Apple Music, and the battle has turned ugly. Spotify has complained to the EU about Apple's allegedly unfair charging practices, with reports this week that a formal investigation into the US tech giant is imminent. This is a clash between "two wannabe monopolies" with the same plan: burning lots of cash to corner a market. That is good news for consumers, but bad news for suppliers otherwise known as "musicians".

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.