SPOT - Baron Fund - Spotify Technology: A Long-Term Winner In Music Streaming

2024-05-16 08:00:00 ET

Summary

• Spotify is a leading global digital music service with over 600 million monthly active users.
• The company has experienced positive growth in subscriber net adds, improved gross margins, and demonstrated pricing power.
• Spotify's product roadmap includes innovations such as audiobooks and AI DJ, positioning it as a long-term winner in the music streaming industry.

The following segment was excerpted from this fund letter.

Spotify Technology S.A. ( SPOT )

We established a position in Spotify Technology S.A., a leading global digital music service, offering on-demand audio streaming through paid premium subscriptions and an ad-supported free option. Spotify was among the originators of paid streaming music after the downloads/Napster era, with the Spotify App launching broadly in the early 2010s. Since then, streaming music has grown at an over 20% annualized pace, and Spotify has been the leading streaming music service globally (and in the U.S.) with over 600 million total monthly active users....

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