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Spotify's podcasting woes are about to get worse

Assif Shameen
Assif Shameen2/9/2022 12:23 PM GMT+08  • 10 min read
Spotify's podcasting woes are about to get worse
Music streamer Spotify faces an existential crisis as it defends podcaster Joe Rogan
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If you are a music fan, you probably use a music app on your smartphone. Stockholm-based Spotify Technology SA is the world’s most popular music streaming service, ahead of iPhone maker Apple Inc’s Apple Music, e-commerce giant Amazon.com’s Amazon Music and Alphabet’s YouTube Music. Over the past month, Spotify has faced an existential threat in the form of a boycott by the musicians and artistes it needs on its platform to survive. On Feb 2, Spotify reported that while it grew its user base and revenues in the last quarter, growth is clearly slowing. Wall Street punished the music streaming firm’s stock which plunged 20% and wiped out US$4.5 billion ($6 billion) in market value. Spotify shares are down 55% from their peak a year ago.

The hammering on Wall Street comes just as the music streaming pioneer is facing an identity crisis. Is it merely a platform which distributes recorded music and podcasts, or is it a media company in disguise? Why does it not police its own content creators and stop them from spreading lies about Covid-19, vaccines, climate change and other toxic commentary? How Spotify navigates out of the current crisis will determine whether it can carve a profitable future for itself.

Spotify, listed on since 2018, has never been profitable. Europe’s only own home grown large digital tech champion, stayed well ahead of Apple in music streaming because its superior user interface appealed to a younger audience. Through slick marketing, discounted plans, lower prices in smaller markets like India, tie-ups with telcos and internet access providers, and its ability to wring concessions from music firms such as Sony, Universal Music Group and Warner Music whom it pays about half of what Apple, Amazon.com and YouTube pay for the same music, Spotify built a formidable market share lead over its rivals.

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