Will Spotify Be Able to Survive the Coronavirus Recession?
Even with many people no longer making a daily commute to work and trips to the gym restricted, Spotify Technology (NYSE: SPOT) still did pretty well during the first quarter of 2020.
Coronavirus is taking its toll on ad revenue (8% of revenue in Q1), but premium subscribers increased 31% year over year to 130 million, with the total by the end of second quarter 2020 expected to be 133 million to 138 million. More than just an in-car radio replacement, Spotify is benefiting from increased music and podcast streaming at home on smart speakers, gaming consoles, and TVs.
However, though Spotify continues to notch growth as the world transitions from a transaction-based to an on-demand usage-based audio entertainment format, the industry remains a low-profit-margin game. Barring any further negative disruption to the business, the audio streaming leader will be just fine. A world free of disruption is not the one we live in, but Spotify is nonetheless prepared.
Source Fool.com
