Spotify stock rose 130% in 2023, could it be more in ’24?
With an incredible year for Spotify, let’s look at what pushed their growth and what to expect from the music streaming service in 2024.
In 2023, Spotify had an impressive year of growth that saw their stock grow 130% from the start of the year. The valuation is even more impressive considering Spotify’s stock price plummet to the lowest evaluation yet in November 2022.
Their recovery comes amidst price-share hikes for tech companies around the world, though represents continued success for the streaming service. Their Q2 2023 report saw 551 monthly active users, up a whopping 27% over 2022.
Spotify have also made some difficult decisions regarding cuts to staff and content this year that have likely had an impact too. In January, Spotify laid off 6% of their workforce. They followed this by laying off 17% of their workforce in December.
2023 also saw Spotify adjust their podcast investments. Their podcast executive Dawn Ostroff left at the start of the year. In June, a big shake up to their podcast business saw their deal with Meghan Markle and Prince Harry end. In the same month, they sold Soundtrap back to the founders and saw around 200 podcasting layoffs. They then cancelled a number of original podcasts in December.
However, for the thousands of podcasts that remain they have added AI-powered translations. One of the remaining exclusive podcasts is their most popular, The Joe Rogan Experience. Their $200 million deal with him ends in 2024 and the departed Ostroff was the deal’s architect.
Whilst podcasts clearly continue to play an important part of Spotify’s ecosystem, these adjustments are likely fine tuning the investment and return upon it whilst balancing it with other forms of audio like audiobooks.
What will Spotify’s value be like in 2024?
After a year of considerable growth for many in the tech industry, some are expecting it to drastically slow down this year. An investment firm put this in perspective for Spotify, saying that whilst they dominate in usership they also face stiff competition and thin margins.
After 13 years, Spotify finally turned a profit at the end of 2018. A few rocky years later and Spotify’s Q2 2023 report show an adjusted operating loss of €112 million.
Spotify recently announced a shake up to their royalties system which, they claim, will see extra revenues going to artists. Whether it will help to impact their bottom line for better or worse we will have to wait and see.