The stock prices of audio streaming services skyrocketed before and after the start of the pandemic. This was due to music listeners spending more time indoors needing musical distraction and inspiration. Now, as we return to concerts and live performances, will the services continue their success in the market? This article highlights three public audio streaming service company stocks as well as their recent business activity- Spotify, Apple, and iHeartMedia.
Audio Streaming Company Stocks: Spotify, Apple, and iHeartMedia
Photo by Juju Han from Unsplash
Spotify Technology SA (NYSE:SPOT)
After a rather underwhelming stock performance so far this year, Spotify (NYSE:SPOT) has turned it around in the 3rd quarter and many market movers stand strong behind it. The stock currently sits at around $278.
With the attention of 48 hedge funds tracked by Insider Monkey, 381 million monthly active users, and 172 million paying subscribers, Spotify is the world’s largest audio streaming company. In fact, in the 3rd quarter, Spotify’s ad revenue increased 75%. In other words, the ad revenue is expected to peak at $1.2 billion by the end of 2021. While growth is triggered by many factors, a leading contributor is the company’s revenue from podcasts, which delivered another quarter of triple-digit growth.
Usually when Spotify offers discounts or free trials, it creates a decline in Spotify’s average revenue per premium user, but not this year. Even with subscription price increases, the company saw its total customer churn rate decrease year over year.
iHeartMedia Inc (Nasdaq: IHRT)
iHeartMedia (Nasdaq: IHRT) has outperformed the market with 3rd quarter earnings of $0.10 per share. A staggering 49.6% since the beginning of the year compared to the S&P 500’s gain of 24.1%. The stock currently sits at around $20.
Recently, DraftKings became the odds supplier for iHeartMedia’s broadcast, digital, podcast, and social platforms. The companies announced they were engaging in a multi-year strategic agreement and gave DraftKings that responsibility. The agreement also allowed DraftKings to co-create and distribute content with preferred access to iHeartMedia’s full roster of diverse personalities. This team up could mean innovation or better customer experience, further adding to the gains going into the 4th quarter.
Apple Inc (NASDAQ: AAPL)
Although Apple’s stock price depends on its entire business, it is worth talking about Apple Music, Spotify’s genuine competitor. Apple Music launched in June 2015 and now has over 72 million users in 167 countries. Currently, Apple has 70 million songs to stream and has made approximately $4.1 billion revenue in 2020, accounting for 7.6% of Apple’s total services revenue ($53.6 billion).
Apple’s iPhone 13, new Mac computers, and fiscal Q4 earnings all released in September and October. After the releases, the stock dropped and came back, and is now only $7 away from its 52-week high at $50.81. Many believe that if Apple has a successful holiday season, it will boost the share price to the 52-week high.
