By Andy Serwer
Spotify has been having a bit of a moment lately. Or maybe it's a dad moment.
Yes, the Swedish-based music streaming company is gaining subscribers and reported better-than-expected earnings recently, but the company is benefitting from other news that resonates most loudly with some of its gray-haired listeners.
The company's stock is up 38% so far this year, to a recent per-share price of $260, versus 10% for the S&P 500. And over the past 12 months the stock has doubled, while the S&P has gained 30%. Spotify stock peaked at $364 in February 2021.
For its fourth quarter reported last month, Spotify posted stronger-than-expected revenue growth, a narrower-than-expected loss and subscriber growth that exceeded expectations. For the current quarter, Spotify expects monthly active users to climb to 618 million -- with premium subscribers rising to 239 million -- and has given a revenue forecast of $3.9 billion.
"As Spotify approaches quarter-end, we continue to see encouraging app download and Google Search query trends," KeyBanc analyst Justin Patterson wrote in a Tuesday note. Patterson says trends suggest that so far this quarter, figures for monthly active users and net subscriber growth likely exceed his estimate of 16 million and three million, respectively.
But that's all a side show compared to some artist awesomeness for Spotify listeners -- at least those of a certain age. After two years of boycotting the streaming service, veteran rocker Neil Young is back on Spotify's streamways. Young pulled his music off Spotify in protest of it carrying Joe Rogan's podcast, The Joe Rogan Experience, because Young said Rogan was spreading disinformation about vaccines. Young didn't drop off Apple Music and Amazon, because he noted they didn't have Rogan.
Now, as these platforms offer Rogan's podcast, Young says, there's no point to his Spotify boycott, so he's relented. "My decision comes as music services Apple and Amazon have started serving the same disinformation podcast features I had opposed at Spotify," he wrote online. "I cannot just leave Apple and Amazon, like I did Spotify, because my music would have very little streaming outlet to music lovers at all, so I have returned to Spotify."
And, as an added bonus, another darling of the glory-days crowd, Joni Mitchell, who recently crushed it at the Grammy Awards, is also back on Spotify this week, having followed Young's boycott over Rogan.
So now Spotify subscribers can listen not only to "Heart of Gold" again, but also "Big Yellow Taxi." What a time we live in!
And there's another recent Spotify touch-point for oldsters, as well. Spotify stock has also been trending up as Apple, a key rival in the music business, has been sanctioned in Europe. And more recently, the United States Department of Justice's lawsuit against Apple is putting the company on its back foot in the U.S., too. In its suit against Apple, the DOJ prominently references its antitrust battle against Microsoft from decades ago -- litigation which is familiar pretty much only to Baby Boomers.
Write to Andy Serwer at andy.serwer@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 28, 2024 09:00 ET (13:00 GMT)
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