After conquering the streaming music market, Spotify Technology is looking to broaden its subscription service with video. Meanwhile, Spotify stock has risen this week.
Spotify is making offers, some reaching seven figures, to video-oriented creators to distribute their shows on Spotify in addition to Alphabet's YouTube, Bloomberg reported Thursday.
Spotify's interest in video content is reminiscent of its diversification push into podcasting starting in 2019, Bloomberg said.
On the stock market today, Spotify stock rose a fraction to close at 337.90. For the week, Spotify advanced 4.7%.
Further, Spotify stock is in a six-week consolidation pattern with a buy point of 359.38, according to IBD MarketSurge charts.
Spotify Stock Gets Rerating
Spotify stock has gotten a rerating from investors thanks to its subscription price increases and improved profitability, KeyBanc Capital Markets Justin Patterson said in a client note Monday. He rates Spotify stock as overweight, or buy, with a price target of 420.
"While investors often express concern about music being a commodity, we believe that: 1) the labels are nudging service providers toward a regular pricing cadence and 2) the value of subscription music makes churn relatively low," Patterson said. "Further, we believe Spotify's product expertise (particularly around playlists and discovery) have created a durable advantage that enables Premium Subscriber net adds to maintain a stable cadence with price increases."
Spotify ranks second out of 20 stocks in IBD's Computer Software-Education and Media industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 85 out of 99.
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