Spotify sets bold precedent with a new $50 billion net worth valuation

Swedish streaming behemoth, Spotify, has once again established itself as the big kid on the block. Formally known as Spotify Technology S.A. in the business world, the firm is now Europe’s first internet platform to rise above the mind-boggling figure. On June 25, a valuation of the market data showed that Spotify’s share prices went up 10 percent, adding $4 billion in market value to an estimated $2.6 billion public value. The overall net worth of the company cumulatively renders out to an insane estimation of over $50 billion. This huge jump for the Stockholm-based firm can be largely attributed to major expansions into new ventures for the platform. 

Spotify previously made headlines by announcing the shift to bring video and podcasting into its service fold. The company aims to pull in a huge population of new users with a multi-year exclusive licensing deal with The Joe Rogan Experience, one of the world’s most popular podcasts. Both announcements show that Spotify intends to become a major contender to YouTube in the online streaming industry by staking off the licensing of one of Youtube’s most valuable assets. This a very modern trend among these giant corporations, and Spotify shows a promising possibility to become something much larger than it already is. A major migration of users to the platform alone could lead to several multifaceted breakthroughs in various different industries. 

The streaming service demonstrates a brilliant skill in concentrating on the right trends. However, Spotify’s strategy to deviate from its dependence on the music industry may prove to be futile. The firm generates most of its profit from being a media services provider, and the dominant issue with conducting business as one spawns from having to owe a giant slice of those earnings to the record labels and artists for music streaming royalties.

Spotify’s move towards diversifying the platform into a larger enterprise may never sever their ties with the music industry because their primary income comes from being a music service. The bold bet to invest in podcasts does not show a likely probability to be as lucrative in the long term scale of things when compared, but the entire idea certainly sets an ambitious prospect for Spotify’s success in the future. 

Photo credit: Anadolu Agency