Graph 1: Time series of Subscribers and Monthly Active Users For this reason, gross margins are expected to decrease to 22-25% from 26.7% in 2018. ![]() The company has announced future sacrifices of margins in a trade-off for growth as it is preparing itself to invest from $400 M to $500 M in strategic acquisitions for 2019. ![]() The platform benefits from a library of over 40 million songs and besides offering subscription packages through its Spotify Premium, which gives access to offline mode, higher sound quality, ad-free listening and its Spotify Connect service, it also allows users to interact for free with some limitations rotating around the already mentioned advantages a normal subscriber would get.The company has been the largest driver of revenues to the music business, generating €10 bn of royalties paid to music publishers.Īs of Q4 2018, Spotify counts its presence in 78 markets around the world and has seen a constant growth in number of users and subscribers (as Graph 1 shows), with 9 million added from Q3 and a 30% increase in revenues year-on-year, going to €1.5 bn (meeting projections), these ones generated from subscriptions and ads. (NYSE: SPOT, $148.52 stock price, $26.861 bn market cap as of February 15th, 2019), launched in Sweden in 2008, is a well-known platform for music streaming service with a community of 207 million users, among whom, 96 million are counted as subscribers. ![]() It analyzes the companies involved in the deals and the Music and Podcast Industries to better understand the ultimate reasons of the move. This article aims at analyzing the two recent and biggest strategic acquisitions of Spotify. ![]() On February 6th, Spotify acquired Gimlet and Anchor, two key players in the Podcast Industry, establishing the beginning of a process of expansion and diversification to ultimately create the largest distributor of audio products, not only music, as Daniel Ek, CEO and Founder stated.
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