Spotify Keeps Rocking Despite SiriusXM’s Desperate ‘Call Her Daddy’ Deal
Spotify is still the mother of all streaming audio entertainment, while SiriusXM's deal for Alex Cooper's podcast smacks of desperation.
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Spotify SPOT is a go-to choice for streaming music, but it’s more than that.
If you’re more of a podcast person, you might enjoy Spotify’s offerings, like The Deck Investigates or The Joe Rogan Experience. If you prefer audiobooks, Spotify provides premium users with 15 hours of audiobook listening per month.
In other words, Spotify is attempting to be all things audio. Based on its growing number of users, it's succeeding.
If you’re a Spotify user, you’re not alone. Globally, Spotify boasts 626 million users, including 246 million premium subscribers, making it the world’s largest streaming music service.
As of the third quarter of last year, Spotify’s global market share was just under one-third of all streaming music listeners, according to Statista.com. Its closest competitor, China-based Tencent Music, controls 14.4% of the market -- less than half of Spotify’s market share.
Spotify continues to steadily grow its premium subscriptions. For the first time, premium subs should exceed a quarter billion by the time Spotify reports earnings after the close on Nov. 12.
That growth is a testament to Spotify’s pricing power. The Stockholm, Sweden-based streaming service has raised prices twice within the past 12 months.
On June 6, I asked if Spotify would continue its rocking ways (green arrow in the chart below). In the four months since then, the stock has gained 18%. Spotify has now gained 100% since the start of this year, and 227.3% over the past five years.
For the past year, Spotify has been in a steady upward trend, adhering closely to its 50-day moving average (blue line). The stock hasn’t traded below its 200-day moving average (red line) since January of 2023.
The stock’s recent pullback has alleviated an overbought condition, with Spotify’s Relative Strength Index now at a more reasonable level of 64.25.
Spotify is about to lose one of its most popular podcasts, Call Her Daddy. The sex and dating podcast will move to SiriusXM SIRI after signing a three-year deal reportedly worth $125 million.
This seems like a move of desperation for SiriusXM. On July 9 (green arrow), we warned investors to avoid this stock. In the three months since then, SiriusXM has fallen by 29%.
SiriusXM, which has lost over 55% year to date, performed a 1-for-10 reverse stock split on September 9. This raised the stock’s price from the low single digits.
Can Call Her Daddy save SiriusXM? For this deal to pay off, SiriusXM needs to keep the spotlight trained on its star, Alex Cooper.
Satellite radio’s stars, like Howard Stern, have a tendency to disappear once they are behind the SiriusXM paywall. Instead of locking her away, the goal for SiriusXM should be to maintain and increase Cooper’s relevance and popularity.
At the time of publication, Ponsi was long SPOT.
