TikTok’s Streaming Loss Is Spotify’s Gain — SPOT Cracks a Record High Following TikTok Music Shutdown Announcement
Spotify stock hit a record high on September 25th, 2024, the day after TikTok Music announced its shutdown. Photo Credit: Gizmodo
TikTok’s music streaming loss is evidently Spotify’s gain, as the latter’s stock price today hit a record high before finishing at what appears to be its largest-ever closing value.
TikTok Music’s shutdown plans entered the media spotlight yesterday with a confirmation that the standalone app, having only launched in 2023, would cease operating in November. As things stand, the precise reason(s) for the abrupt move are unclear. However, licensing hurdles, lingering friction from the TikTok-Universal Music impasse, and/or slower-than-expected TikTok Music adoption all come to mind as possibilities.
Whichever factors contributed to the streaming app’s demise, the news is a welcome surprise for competitors like Spotify, Apple Music, and Amazon Music. Of course, if TikTok Music had possessed an unlikely path to commercial success, its shutdown wouldn’t have made much of a difference.
But given the many examples of TikTok proper’s discovery and promotion effectiveness, there was seemingly an opportunity to convert users into subscribers via the main app – and more directly spur streams on particular tracks in the long run. Additionally, the service was operating in nations where substantial streaming market share is up for grabs: Brazil, Indonesia, Singapore, Australia, and Mexico.
In any event, as initially mentioned, Spotify stock (NYSE: SPOT) is riding higher than ever in the wake of TikTok Music’s closure announcement, to the tune of a record per-share price of $386.96 today. Subsequently, SPOT settled to a best-ever $383.96 trading-end price, reflecting a $77.10 billion market cap.
While these accomplishments arrived the day after TikTok Music revealed plans to shut down, it goes without saying that other factors are also at play. Spotify is continuing to expand its well-received AI tools, rate cuts arrived earlier in September, and all manner of analysts are voicing decidedly bullish SPOT forecasts and target prices.
2021 looks to have been the last time these targets were so aggressive – but much has changed since then and since SPOT’s subsequent falloff. At the time of Spotify stock’s first ascent to almost $400 per share, the broader tech sector was benefiting from a curious amount of market optimism, and the streaming platform was separating itself mainly by throwing around huge sums on podcasts.
Now, though, Spotify has tightened the belt in multiple areas and expressed a commitment to remaining in the black. Additional price increases are on the table, an audiobook expansion (despite receiving a less-than-positive music industry reception) could drive further growth, and evidence strongly suggests that the company is plotting a major entry into video as well as UGC.
Digital Music News was out first on the latter development in April, when we reported on clear-cut evidence of a UGC and/or video embrace at Spotify. July then brought full TV episodes and comedy specials to Spotify under a Cineverse pact, and reports earlier in September indicated that the service was offering video creators seven-figure deals to begin uploading their content.
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