Spotify shares rose 4.7% to $214.13 this week, helping the Billboard Global Music Index improve 2.3% to a record 1,595.11. Spotify's fourth straight weekly gain came two weeks ahead of fourth-quarter earnings on Feb. 6, which will show the full impact of its recent price hikes in the United States and other major markets.
If a rising tide lifts all boats, Netflix's stellar fourth-quarter earnings report explains why Spotify shares had another positive week. Netflix shares rose 18.1% to $570.42 this week — including a 10.7% gain on Wednesday alone — after the company said it added 13.1 million subscribers in the fourth quarter, the most since 2020. with revenue up 12.5% to $8.8 billion. Not only was the quarter encouraging for streaming in general, but the video streaming giant offered the music business some insights into finding growth in a mature market: Netflix's growth was unaffected by either the company's continued price hikes or its recent attempts to restrict the password. division. In fact, pricing played a major role in this growth.
“As we invest in and improve Netflix, we'll occasionally ask our members to pay a little extra to reflect those improvements, which in turn helps drive a positive cycle of additional investment to further improve and grow our services,” the company stated in one letter to shareholders. Reducing password sharing also has an impact. Netflix said “millions” of subscribers use features such as Transfer Profile (a user transfers a profile from a shared account to a new account) and Extra Member (adding a user to an account for $7.99 per month in the United States) and that paid sharing “is now a normal course.”
Because of its large capitalization, Spotify's gain was a major factor in the Billboard Global Music Index's 2.3% gain this week. The top-performing music stock of the week was iHeartMedia, which gained 26.7% to $2.85, placing it 68% below its 52-week high of $9.01. Music streaming company LiveOne was another high performer, gaining 13.5% to $1.51. The company was announced on Thursday that Podcast One — LiveOne spun off the podcast company and remains the majority owner — reached new deals with two of its most popular podcasts, The Adam Carolla Podcast and The show Adam and Dr. Drew. Elsewhere, shares of Sphere Entertainment Co. rose 8.7% to $34.45 after the company recently hired former Google executive Jennifer Koester as president of Sphere Business Operations, effective Feb. 5. One of Koester's duties will be to develop a corporate conference business for product launches and other events.
Eight of the index's 20 stocks fell this week — though none fell more than 3%. Shares of SiriusXM fell 1.5% to $5.34. the company was announced On Wednesday that it will maintain its quarterly cash dividend at $0.02666 per share. Hipgnosis Songs Fund fell 2.1% to £0.7057 a share amid multiple regulatory filings hinting at tension between the company's new board and its investment adviser, Hipgnosis Song Management. Hipgnosis shareholders will vote on Feb. 7 on a proposal that would result in a fee being paid to bidders on its list.
Stocks were broadly higher in the United States this week as positive economic news weighed on markets. The tech-heavy Nasdaq climbed 0.9 percent to 15,455.36 and the S&P 500 rose 1.1 percent to 4,890.97. Microsoft, Alphabet and Meta hit new highs this week, although Tesla shares fell 13.6% after the company warned that unit sales in 2024 “may be significantly lower” than last year. On Friday, Intel shares fell 11.9% after the company offered investors a disappointing outlook for the current quarter during Thursday's earnings call.
On Thursday, the US Commerce Department's Bureau of Economic Analysis published data that showed gross domestic product grew at a better-than-expected annual rate of 3.3 percent in the fourth quarter of 2023. Then on Friday, the Commerce Department released data which showed that personal incomes ended the year on a high note, rising 0.3% in December. In addition, a measure of how much people are spending showed that price increases have slowed. Personal consumer spending in December was 2.6% higher year-on-year (and 2.9% higher excluding food and energy). Last week, new consumer sentiment data showed an improvement in Americans' feelings about the economy and their expectations of future inflation.
Stocks also improved outside the United States. In the UK, the FTSE 100 rose 2.3% to 7,635.09 points. South Korea's KOSPI composite index improved 0.2 percent to 2,478.56. And China's SSE composite jumped 2.8 percent to 2,910.22.
from our partners at https://www.billboard.com/pro/spotify-shares-rise-netflix-earnings-music-stocks-record/
