Musicians and music labels have an incentive to make deals with several platforms, instead of letting one take over the industry. Content costs make up nearly 70% of revenue, and artists and brands are fighting hard to increase their own take.

The other main problem for Spotify is that the content it plays doesn’t come cheap. By 2022, Russo expects Spotify to have 232 million subscribers versus Wall Street estimates of 241 million. At the same time, about 38% of global consumers continue to pirate music content by one estimate. And while Spotify is the market leader, its competitors include companies like

Russo finds that estimate too aggressive, in part because free radio content remains the most popular way to consume music. Wall Street’s estimates for subscriber growth imply that roughly half of all households in North America and Latin America will pay for a music subscription and Spotify can maintain its roughly 31% market share, Russo writes. and around the world, but thinks Wall Street is too bullish on the company’s margins and customer growth. Russo expects Spotify to continue to grow in the U.S.

Spotify stock price target