Do they need to find it?ĪNDREW MAROK: And I think that's one of the things that predicated our upgrade, is that now, you're correct, this is very much a margin story, a profitability story.

Spotify, I would argue, hasn't been- hasn't found that religion yet. But that global network that Spotify has, the vast opportunity for subscriber uptake internationally, especially, is something that we think that they can continue to chip away at over the next several years.īRIAN SOZZI: Andrew, there has been a day of reckoning, I would say, that has come to the entire streaming media space over the past few months, a much more greater focus on free cash flow, a much more mindfulness on what's being spent and how it's being spent. They'll compete with Apple Music in many markets, in some markets, some local players that have some specialized local market features. To that effect, Spotify is the key global scale player in streaming music. It's really kind of on things like product differentiation and network effects. There isn't the price competition that you see in streaming video. On the streaming media side, the dynamic where the major labels own a significant majority of the content and are also basically dependent on the streaming platform, such as Spotify and Apple Music, to power industry growth, makes that a much more stable contingent. So what we see in the competitive environment for streaming music is a lot more stable environment than you see, for instance, in streaming video, where content owners are increasingly taking ownership of their content, walling it off, going directly to consumers. Andrew, great to have you here.Īll right, so first and foremost, the Spotify kind of bullishness here, how does that continue to hold up, even in the face of an install base that Apple has, a number of users that are on the even Amazon Music services, and how do they continue to kind of outlast that competition from your perspective?ĪNDREW MAROK: Great, and thanks for having me on. Here to break this all down is Raymond James internet and digital media analyst, Andrew Marok. BRAD SMITH: Raymond James upgrading Spotify to outperform, noting that the platform remains as the market leader in streaming music with key competitive advantages, despite unchanged challenges facing the business.

Is spotify stock a buy