1 Music stocks that are only worth buying and holding for a long time

Last year was an important year for the music industry. According to the International Federation of the Phonographic Industry (IFPI), which represents the recording industry, the global recorded music market will grow by 10.2% in 2023 to reach $28.6 billion. This is higher than the previous year's growth of 9%.

Unsurprisingly, in this digital age, most of the growth has come from streaming. Streaming subscription revenue grew by 11.2%, or about half of total music revenue.

There is no doubt that the king of streamers is theSpotify (NYSE: SPOT)It accounts for 31.7% of the global streaming media subscription market.Applemusic andAmazon Music's market share is only 12.6% and 11.1% respectively.

The Rise of Spotify

Spotify launched its namesake platform in 2006 as a free,郃 alternative to the commonplace piracy of music. spotify uses a "free" model, whereby it offers free products to attract users, and generates revenue by persuading them to upgrade to a paid version.

One of Spotify's early differentiators was the use of algorithmic music suggestions. The app could learn about a user's tastes and create unique playlists tailored to them. This remains one of Spotify's hallmarks and continues to keep users loyal.

In Apple, Amazon,Microsoftrespond in singingAlphabet With competition from tech giants such as Spotify, Spotify's achievements are impressive.

Internet audio subscription service

A 2023 survey showed that 42% of U.S. adults had listened to a podcast in the last month, three times more than a decade earlier.Spotify went all in on the popularity of podcasts, and the bet paid off.

In 2020, the company acquired Megaphone, a podcast software-as-a-service (SaaS) specialist, for $235 million, and reportedly paid another $200 million to buyThe Joe Rogan Experience. ) Unique Copyrights for PodcastsThe

To date, Logan's podcast remains the most popular podcast in the world, with almost twice as many listeners as the second most popular podcast. Due to its success, Spotify remains the most popular podcast platform in the world.

Podcasts are one of the best advertising mediums for investors, and Spotify's data shows that as many as 81% users have taken action after hearing an ad while listening to a podcast, making podcasts a valuable advertising resource.

Data

Spotify's fourth-quarter 2023 report shows the company in a strong position. The streaming media company added 602 million monthly active users (MAUs), a year-over-year increase of 231 TP3T, of which 236 million were Premium users, a year-over-year increase of 151 TP3T, both of which exceeded the company's previous guidance.

The growth in subscribers has resulted in strong financial gains for Spotify. Total company revenue reached $14 billion, a 13% increase from 2022.

Is this stock worth buying?

Spotify reported a net loss of $566 million last year. However, there is reason to believe that the company will be profitable by 2024.

The company did not provide full-year performance guidance, but told investors that it expects ......2024 to have a healthy full-year performance:

Spotify has been working hard to cut costs, including three rounds of layoffs last year that resulted in more than 20%, while MAUs have been growing rapidly and the company has finally raised the price of its premium subscriptions. I believe these factors will allow Spotify to finally become profitable by 2024 and sustain its long-term success, making the stock a long-term buy.

Should you invest $1,000 in Spotify Technology right now?

Consider this before buying shares of Spotify Technology:

Motley Fool Stock AdvisorA team of analysts has just named what they think is the best name for investors to buy right now.10Only ...... and Spotify Technology were not included. The 10 stocks that made the list could generate huge returns over the next few years.

Stock AdvisorIt provides investors with an easy-to-understand blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. Since 2002, StockAdvisorThe service has more than doubled the return on the S&P 500 Index.

View 10 stocks only

*Stock Advisory Rates as of April 15, 2024

Johnny Rice does not own any of these shares. Suzanne Frey, a senior executive at Alphabet, is a member of The Motley Fool's Board of Directors. John Mackey, former chief executive officer of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool Board of Directors. The Motley Fool owns recommended stocks in Alphabet, Amazon, Apple, Microsoft, and Spotify Technology. The Motley Fool recommends the following options: Microsoft January 2026 $395 Calls Long and Microsoft January 2026 $405 Calls Short. The Motley Fool has a disclosure policy.

1 Music Stocks Only Worth Buying and Holding for the Long Term was originally published by The Motley Fool.