The most valuable stock in the world?
By 2020, Spotify could be one of the most valuable stocks in the world, according to a new report by Investment Bank GP Bullhound.
The report shows streaming giant Spotify blowing past the competition, including Apple Music. What factors went into determining this massive Spotify value?
Faster growth means more value
For starters, Spotify is experiencing a faster than expected subscriber growth.
Just last July they announced 60 million paid subscribers and that number is predicted to reach a 100 million in 2018.
Penetration of new markets
Spotify has already penetrated Asia with 2017 being a huge year of expansion.
Not only have they gained access in Japan, Indonesia and Singapore, but even Thailand and Vietnam are in their crosshairs.
If the rumors are true that India is on their list, that would help propel even faster growth.
Better deals with music labels
As Spotify’s user base continues to grow, they gain more and more leverage with the big labels.
They’ve always needed the labels more than they needed Spotify.
2017 has seen the beginnings of a power shift.
Spotify’s massive playlists are now the major force in breaking out new artists. There’s nothing to stop them from taking away support from labels not willing to play ball.
Also with Spotify branching out into more diversification of content, they also gain power. As their own programming starts to gain popularity, this will decrease the overall percentage they need to payout. This is a page straight from the Netflix playbook.
- Spotify promo: learning to swim in the big pond
- Playlist promotion now #1 tool for breaking out artists
GP Bullhound’s sees Spotify’s value hitting $20 billion after its IPO. These projections come from using numbers based on Spotify having 100 million free users and 70 premium users. Which Spotify is likely to hit over the next several months.