Gustav Söderström - How Spotify Thinks - [Invest Like the Best, EP.424]

Bullish:

• $SPOT - Spotify is positioned for future growth and profitability due to its long-term investment in R&D for the music industry, challenging the market narrative of an unsustainable business model. The company's strategy includes expanding into audiobooks, which could significantly increase market size by bundling them into the subscription model.

  • “We are literally the R&D department of the music industry. We invested and have had losses for fifteen years and the music industry has been gaining profit.”

    Gustav·1:00:23

  • “In The US, audiobooks was a very niche behaviour, ten, eleven million or something people who paid for them a la carte. And the idea was that's a limitation because of the business model. When you pay a la carte, you're not going to explore new books at $15 per book cost.”

    Gustav·1:14:10
• $MUSIC - The music industry is experiencing unprecedented growth, with streaming services like Spotify contributing to increased overall revenue. This challenges the narrative that streaming has negatively impacted the industry's profitability.

  • “The music business is bigger than it was back then. So this is the best it's ever been. It is better than ever, more money than ever. The pie is both bigger and higher, but it's also getting sliced up.”

    Gustav·1:01:49
• $GENAI - Generative AI represents a significant shift from traditional machine learning, offering potential for two-way interaction and reshaping product development and user interfaces across industries.

  • “I think what changes in the age of generative AI is that you can take natural language inputs. And so even if technically they're both machine learning, I think of generative AI as the new age. And the big shift is that it's two way.”

    Gustav·32:52