Spotify Lists on the New York Stock Exchange: How Will They Do?

Source: Reuters

Spotify began listing on the New York Stock Exchange in an unconventional public offering.  The company did not issue new shares, it simply made 90% of outstanding shares available to sell.  Buyers were matched with sellers similar to a huge public auction.  Other than an Exchange screwup with the wrong flag being raised (a Swiss flag was raised, not a Swedish flag!), it appears the first day of official trading was solid considering the fall and volatility the market has seen over the past few weeks.  But, how does Spotify do going forward?

The Spotify stats:

  • Founded in Sweden in 2008, over 3,500 employees
  • Service is available in 65 markets
  • Over 156m active subscribers
  • 36m songs and over 2b playlists
  • Spotify has by far the largest base of paying music subscribers:
    • Spotify 72m
    • Apple Music 38m
    • Pandora 5.5m
    • Amazon has not publically stated its size, but is rumored to be in the #3 position and growing quickly


First, where is music streaming space heading? 

To differentiate, streaming services will compete similarly to paid TV services.  This is, who can attract new subscribers via unique content such as concerts, podcasts, interviews, and new AI experiences.  This is where it will be most difficult for Spotify to lead.  Apple, Amazon or Alphabet are not relying on music to turn a profit.  The trio is happy to make money but just as energetic about creating stickiness for their ecosystems.  If the space turns into a spending game of unique content, these big players will win.


The positives for Spotify:

There are some positives going for the company.  Other than being the leader in streaming music customer base and with the expectation of 33% growth over the next 18 months, the company has been known for creative ways attempting to work directly with artists.  Spotify is known to be the most artist-friendly of music services.  The company attempts to differentiate by working to promote artists and providing an easy platform for subs to purchase concert tickets, for example.  The company has also launched ‘Spotify for Artists’, which gives artists data on who is listening to their music—demographics and geographic footprint.

The company boasts that because of its size, Spotify has also been able to negotiate more favorable contracts with the large record labels.  Spotify is also known as a leader in user experience via AI.  This is, better algorithms to suggest music which will be liked by subscribers—the company hints more is en route.

Spotify works seamlessly across platforms and has a strong global presence.  This contrasts with its competitors.  Apple has a strong following across its hardware base, but the company is limited across Android devices.  Amazon is very strong within the US, but weak in many regions.

The negatives for Spotify:

The streaming music business is tough to turn a profit as royalty payments are so high.  Pandora, which went public in 2011, has not yet turned a profit.  What makes it so tough is royalty payments skim 70%-75% of revenues.  In addition, companies make only small amounts of money on ‘free’ ad-based subscribers—Spotify to the tune of only 10% of its total revenues come from ads.  Therefore, to turn to profitability, the company must convert ad-based ‘free’ subscribers to monthly paying subs.

Spotify has toyed with the idea but does not make its own music hardware.  Apple, Google, and Amazon have increasingly popular AI assistants.  It is simple for users to receive music within the ecosystem of the AI assistant of their choice.  In addition, Spotify must pay Apple and Google a small cut due to Spotify’s in-app payments within iOS and Android.


Spotify is off to a promising start during its honeymoon IPO period.  The key will be the next 18 months–will the company be able to convert non-paying subs into paying subs.  The company may shake things up with leading AI or unique competitions with record labels.  However, it will be a difficult road ahead to lead in the streaming music space with Apple, Alphabet and Amazon all competing in the same arena with much deeper pockets.

Jeff has 25+ years experience in technology research, business development, competitive intelligence, and business management. Prior to joining Counterpoint Research, Jeff held various research & product development roles at Microsoft, Nokia, Roth Capital Partners, and Gartner. Jeff is a member of many telecom industry organizations including Colorado Wireless Association,, CommNexus, and is a regular speaker at major telecom industry events. He was a 4x NCAA all-American in tennis and is a 12-time finisher of the Hawaii Ironman World Championships.

Term of Use and Privacy Policy

Counterpoint Technology Market Research Limited


In order to access Counterpoint Technology Market Research Limited (Company or We hereafter) Web sites, you may be asked to complete a registration form. You are required to provide contact information which is used to enhance the user experience and determine whether you are a paid subscriber or not.
Personal Information When you register on we ask you for personal information. We use this information to provide you with the best advice and highest-quality service as well as with offers that we think are relevant to you. We may also contact you regarding a Web site problem or other customer service-related issues. We do not sell, share or rent personal information about you collected on Company Web sites.

How to unsubscribe and Termination

You may request to terminate your account or unsubscribe to any email subscriptions or mailing lists at any time. In accessing and using this Website, User agrees to comply with all applicable laws and agrees not to take any action that would compromise the security or viability of this Website. The Company may terminate User’s access to this Website at any time for any reason. The terms hereunder regarding Accuracy of Information and Third Party Rights shall survive termination.

Website Content and Copyright

This Website is the property of Counterpoint and is protected by international copyright law and conventions. We grant users the right to access and use the Website, so long as such use is for internal information purposes, and User does not alter, copy, disseminate, redistribute or republish any content or feature of this Website. User acknowledges that access to and use of this Website is subject to these TERMS OF USE and any expanded access or use must be approved in writing by the Company.
– Passwords are for user’s individual use
– Passwords may not be shared with others
– Users may not store documents in shared folders.
– Users may not redistribute documents to non-users unless otherwise stated in their contract terms.

Changes or Updates to the Website

The Company reserves the right to change, update or discontinue any aspect of this Website at any time without notice. Your continued use of the Website after any such change constitutes your agreement to these TERMS OF USE, as modified.
Accuracy of Information: While the information contained on this Website has been obtained from sources believed to be reliable, We disclaims all warranties as to the accuracy, completeness or adequacy of such information. User assumes sole responsibility for the use it makes of this Website to achieve his/her intended results.

Third Party Links: This Website may contain links to other third party websites, which are provided as additional resources for the convenience of Users. We do not endorse, sponsor or accept any responsibility for these third party websites, User agrees to direct any concerns relating to these third party websites to the relevant website administrator.

Cookies and Tracking

We may monitor how you use our Web sites. It is used solely for purposes of enabling us to provide you with a personalized Web site experience.
This data may also be used in the aggregate, to identify appropriate product offerings and subscription plans.
Cookies may be set in order to identify you and determine your access privileges. Cookies are simply identifiers. You have the ability to delete cookie files from your hard disk drive.