Spotify Stock Just Jumps After Samsung Partnership Announced
Music streaming platform Spotify Technology (NASDAQ:SPOT) stock enjoyed a nice boost today thanks to a newly announced partnership with Samsung (KRX:005930). The deal will see Spotify slot in as Samsung’s official music streaming partner to combat the likes of Apple Music and Amazon Prime Music.
The world’s number one music streaming service went public in April via an uncommon direct listing. Check out our coverage here.
Spotify stock rose by just under 5 percent on the day closing at $187.38. Prices have thus far peaked in July at $196.28, however, today’s closing price is still up 25% from $149 after SPOT’s first day of trading back in April.
Spotify will be the default music provider on everything Samsung makes from Galaxy phones (including the newly announced Galaxy Note 9), to the brand’s Smart TVs, all the way to the newly announced Samsung Galaxy Home Speaker.
The Galaxy Home will do battle with the likes of all-in-one speaker stalwarts like the Amazon (NASDAQ:AMZN Echo, Google (NASDAQ:GOOGL Home, and the Apple (NASDAQ:AAPL) HomePod. Once a user prompts the Galaxy Home to play a song, it will be Spotify that supplies the tunes.
Music streaming landscape is evolving rapidly
The timing of the partnership couldn’t have come at a better time for Spotify. Have a look at the market share of the major players from roughly one year ago:
The pie chart above shows global commercial subscribers for the three major streaming platforms. As of a month ago, Apple Music counted 50 million global subscribers and Spotify stated in April that it had 75 million subscribers.
More alarming for the Stockholm-based Spotify are United States numbers. As of July 2018, Apple counted 21 million subscribers and Spotify claimed it had about 22 million. Apple expects that by the close of 2018 it will enjoy 27 million U.S. subscribers while Spotify only expects to grow to 24 million, meaning Apple will reign as king of American music streaming if things keep up this way.
A partnership to be the default music streaming service on millions of different Samsung devices will provide the Swedish music streaming giant some much-needed punch in its fight with Apple, but only time will tell if it will be enough to ward off Apple’s play music streaming dominance.