Spotify stocks with return on equity are forecast to be high in 3 years (42.29%) and have skyrocketed in valuation with the acquisitions of two of the most famous podcasters in the industry. After Joe Rogan signed a $100 million deal with Spotify, Kim Kardashian soon followed a few weeks later. Both of them are incredibly famous personalities and signing Podcast deals with Spotify shows us a new trend that may be forming. This trend is that of podcasts. Are they the future of entertainment? How have podcast acquisitions affected Spotify Stocks and their valuation? What do these individual deals mean for Spotify and its podcasters? Let us have a look.
Spotify and Podcasts
Spotify has made bullish moves in the market by making some high-profile podcast deals. These include deals with Joe Rogan, DC Comics, and Kim Kardashian. Spotify has capitalized on a market that very few thoughts existed and is gaining many benefits out of it. Moreover, these podcasts have incredible monetization capabilities, with Spotify aiming to charge premiums and subscriptions from users to maximize this potential.
Spotify had announced it would spend nearly $500 million on podcast plans. This could be a real power move with the celebrities they have on board. Spotify knows podcasts earn ad revenue, with estimates stating that podcasts would bring in $659 million in revenue by 2020. With Spotify leaders having backgrounds in Disney and Netflix, we could possibly see a platform as big and as exclusive as those two. This time, it will be for music and podcasts.
Joe Rogan with “The Joe Rogan Experience”
Joe Rogan is a world-famous podcaster, considered to be the best around. Shifting his podcast “The Joe Rogan Experience” exclusively to Spotify showed Spotify’s intent early on. The deal is considered to be of nearly $100 million, with Rogan moving all of his content to Spotify. This not only brings Rogan to the table, but also his millions of viewers worldwide. As a result of this deal, Spotify Stocks have gone through the roof. Prior to the deal, Spotify stocks were worth $161.43. After the Rogan announcement the number rose to $189.80. The company was able to raise its stock by 17.75% in 48 hours. Spotify had a net worth of $30.5. billion which rose to $35.29 billion. That is a 5 billion dollar rise with just one deal. A huge win for both Spotify and Rogan.
Kim Kardashian West Signs for Criminal-Justice podcast
Kim Kardashian West signed a deal a couple of days ago with Spotify for an exclusive podcast. She will cover wrongful convictions in the justice system, a hot topic in recent weeks. However, it is unlikely that Kim’s deal will be as lucrative as Rogan’s since she isn’t shifting an already popular podcast to Spotify. The financials regarding the deal are still unclear. However, Spotify stocks continue to rise due the announcement of these high-profile deals. As these deals come into fruition, Spotify shares are up 86% over the past three months as the S&P 500 SPX, -0.56% has added 30%. This is an incredible rise, marking the most successful period in the company’s history.
Are Podcasts the future of entertainment?
Podcasts have loads of potential. With the current pandemic in effect for who knows how long, we may be shifting completely towards online entertainment for the time being. Podcasts offer a different touch than that of TV shows and movies. They tend to be more relatable and engaging.
With Joe Rogan and Kim Kardashian heading Spotify’s way, Spotify could become the single biggest force in the audio industry.
Let us know your thoughts in the comments below!