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This is a hard question for me. I got asked today if I believe too much in $SPOT and $ROKU, then would I continue buying at $270 and $150? Here’s my answer.
By now, most everyone has seen the foray of Spotify into the podcasts scene but that is just one of the many catalysts that I foresee in Spotify. One of the catalysts I believe for further upside is hyper targeted advertising. $SPOT today enjoys 90% of their revenues solely
In subscriptions. 10% only in ads. Two levers here, the subscriptions is easy to increase in the long run because it is just averaging 4 dollars. I can see this hitting at least 5-6 dollars and with their scale, that’s additional 200-400M dollars or euros in the bottom line
If $ROKU can make hyper targeted ads with $WMT and $KR, I surmise most of the newspapers are also in the VODCASTS and PODCASTS to which Spotify is the superior leader. Hence I do think that a significant chunk of digital advertising will go to SPOT in the long run. This creates
Another billion dollar revenues annually which can easily be at least 2 billion dollars by 5 years we are starting to only appreciate it coz spot has to convert those ads to direct purchases
Education is a trend. Spotify listeners may be able to listen to history and watch and learn more from experts than their teachers. Audio books have lead this and this is going to grow. JK Rowling cast of Harry Potter made reading books audible so yes
I think Spotify can promote books and give competitive sizzle towards Amazon’s audible books. It may be true that authors will read and sell their books inside Spotify - D2C marketing. Listen to one chapter. Listen to 20 chapters and pay to continue
Furthermore I think that Spotify barely scratched the surface in terms of funding musicians and their music videos. Instead of Warner Music or Sony music, I think Spotify is as big or even bigger than WMG SNE and Universal in the music scene. They own long tail content
This brings me to the limitless and unlimited upside I foresee for $SPOT. I don’t know the future but I am wild enough to think it’s at least 10X. So at 150 I own. At 180 I own. At 250-270, I will own for the 5-10 years future visions I have for this great company.
As for Roku, it is a market share leader. You conquered America. You’d conquer all the eyeballs globally. There simply is insatiable appetite for convenient and platform agnostic advertising. Others can give a better bullish statement for Roku. I’m gonna just sit for the ride ;)
DC has a podcast. I think this will help increase comic books. Who’s to say Disney’s Marvel won’t have their best podcasts too. I enjoy podcasts. Hundreds of millions do too. Definitely a market we will see more futures and parallel universes too
I see growth. I see scale. I see leadership. Lots of revenue streams. Margin expansion. And for those reasons. My answer is yes I will not have a difficult time adding to a winner if I don’t have any wonderful ideas.
