Spotify Drops hard

Spotify is a Swedish music streaming and media services provider founded back in 2006. Spotify is the biggest music streaming service with around 300 million active users. Spotify group is a billion-dollar firm and has been doing well for the past few years, but 2020 has been hard on the company. 


This year Spotify went from a bull graph to a bearish trend and its stock price has fallen over 1.5% currently trading at $232.6 which is lower than its average $300 price mark. Spotify has now lost money for 3 quarters in a row and is still falling down. Even though the monthly active users grew by 29% this year still the revenue didn't reach the expectations. 

Spotify's rivals have shown amazing quarterly results, with the quarantine contributing to the cause it looks like Spotify is in a tight spot. One of the major reasons Spotify stock is dropping is because of Apple music and Amazon music. Let's see how they challenged the music streaming platform.

Apple music

According to the wall street journal, if the Apple Music subscriber base continues to grow in the US, it will soon overpass Spotify as the No.1 America music streaming platform. For the past few years, the growth rate of Spotify has been 2% whereas apple music is growing at a 5% rate worldwide. Apple Music came out in 2015 and already has 68 million paying users compared to 138 million paying users when Spotify has been around for more than a decade. 



Apple Music boasts 15-20% revenue growth every year, and most of IOS users use Apple Music. It also showed a surge of growth after the Apple Homepod came out in the market, which has the service pre-downloaded. Apple Music has this well-placed strategy in place wherein you get 6 months free service if you put in your credit details and 6 months later Rs.99 per month will be credited, and the majority of users will forget the date in 6 months time.  

15th September they looked into the matter when Spotify complained about the Apple Appstore practices they follow.  Apple certainly does the have the power of marketing in Apple devices to promote its app, but Spotify has its own partnership with Hulu and Samsung mobiles. Apple said that "Its new Apple one service isn't unfair to Spotify and that customers still have the freedom to discover and enjoy alternatives". There is an Apple antitrust investigation going against the App store practices. Spotify has claimed that the company uses limited consumer choices to favor their Apple Music and Books services. 

Amazon Music

Amazon Music was launched in 2007 and is operated by Amazon. It was the first music store that sold music without digital rights management to 4 major music labels. On 16th September Amazon added an update to the app and now has podcasts to its service. Amazon music added famous podcasts like RadioLab and promised original shows hosted by DJ Khaled, Will Smith, and many more big names. The podcasts are not available as of in India but will be soon, it is now available in the US, Britain, Germany, and Japan. 

Spotify shares slid down by 1.2% when it was announced that podcasts will be available and by 3% on Wednesday when it was updated. The podcast industry in the music platform competes with Spotify and Apple already having a loyal base, but their stock price took the hit. Amazon's voice-activated Echo devices will also play podcasts from their music library. 


In conclusion, yes Spotify stock dropped by a few percentages and the market is highly competitive now but still, the platform is one of the best there is and just needs a few months' time to shake it off and get back in the game with something new. 

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