Spotify’s stock plummeted on Wednesday as the music streaming service, which has to get dogged by controversy over its popular podcaster Joe Rogan, forecast weaker profit margins in the coming quarter as user growth slows.
In the fourth quarter, the company reported solid improvements in monthly active users and premium subscribers, in line with expectations.
However, the streaming service expects its gross profit margin to drop to 25% from 26.5 percent in the first quarter of 2022. It also expected to add only three million premium customers during that time, a significant drop from recent quarters.
Spotify has lost several music legends recently, including Neil Young and Joni Mitchell, because it handled Rogan’s controversial views on COVID-19 vaccines.
Despite this, executives praised the platform’s long-term development potential. They defended their handling of the Rogan scandal, saying it was too early to tell how the incident influenced the financial performance.
In after-hours trading, Spotify’s stock dropped 10.9 percent to $171.00 (approximately Rs. 12,800).
The stock other “stay-at-home” shares have gained from the COVID-19 pandemic’s interruptions life. It has plummeted in value over the last year.
Revenues grew 24 percent to EUR 2.7 billion, resulting in a quarterly loss of EUR 39 million (approximately Rs.).
“We see a significant amount of greenfield on the horizon,” Spotify said, citing “continuing momentum in our subscription business and meaningful advertising outcomes.”
The Rogan incident got not mentioned in Spotify’s press announcement, which emphasized that “consumption trends on the podcasting platform remained strong.”
Spotify’s Chief Executive Daniel Ek declared on Sunday that any podcast that addresses COVID-19 received a content advisory directing consumers to government health authorities and other reliable sources.
Following a request from medical specialists to ban Rogan from spreading “many myths concerning COVID-19 vaccinations,” Young and other musicians departed the platform.
Young’s old Crosby, Stills, Nash, and Young bandmates said on Wednesday that they had asked their labels to remove their tracks from Spotify.
In his opening remarks and response to multiple inquiries from analysts, Ek addressed the issue.
While Ek believes Spotify might have communicated its policy sooner, he is pleased with the response.
That’s all about it!! If you’ve enjoyed reading the news, feel free to share it with your near and dear ones. Stay connected with us for more such updates!!
