In 2021, Spotify introduced Car Thing, a hardware device designed for vehicles. Table 1: Subscribers Wo Use Spotify on Multiple Devices (source: Created by author using data from Spotify)
Most Spotify subscribers utilize the app across multiple devices though, which is supportive of Spotify's expansion. Mobile operating systems offer a platform for competing audio apps, and Spotify must create value beyond this option. It is not clear that users derive significant benefits from an audio platform, outside of synchronization of the user experience across devices and greater simplicity from utilizing a single vendor. While this makes sense from a financial perspective, the user benefits of bundling different services into the one application should be questioned. For example, Spotify's ventures beyond music and podcasting are similar to Netflix's ( NFLX) foray into gaming. Spotify has laid out plans to become a general audio platform, and in many ways, this is similar to a range of companies who are trying to position themselves as super apps. In the current economic environment it is difficult to see the share price moving higher until meaningful margin improvements are made. Spotify appear to be growing frustrated with this situation, as they have recently made an effort to improve their communication with investors and tell their story more clearly. Investors don't appear to be convinced though, as the stock price is at all-time lows, despite continued robust growth. Over the past few years, management have been trying to move the business beyond music, to create more value for shareholders. Investors have long been skeptical of Spotify's ( NYSE: SPOT) business model, with good reason.
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