🎶 Spotify acquires its "ESPN"

Thursday, February 6, 2020 by Robinhood Snacks | Disclosures

"I did not see that acquisition coming!"

Dow Jones
29,291 (+1.68%)
S&P 500
3,335 (+1.13%)
Nasdaq
9,509 (+0.43%)
Bitcoin
$9,600 (+4.51%)
10-Yr US Treasury
1.649%

Hey Snackers,

Day 3 of the TBOY Awards is upon us. Last night, WeWork's Adam Neumann took home the TBOY Trophy for Best CEO in a Leaving Role (fugitive Carlos Ghosn was runner-up).

Now we're going international. Join us @RobinhoodSnacks on Twitter to vote for our next category, Best Foreign Firm:

  • 🍺 AB InBev, Belgium: went hard on BudLight seltzer
  • 🎶 Spotify, Sweden: went hard on podcasts
  • 👟 Adidas, Germany: launched Beyonce's line
  • ☕️ Luckin, China: tripled coffee shops, 6X'd revenue

Tesla's epic rally came to an end, but markets soared to record highs. Plus, China announced overnight it'll halve many of its tariffs on US goods. Happy Thursday.

Heard
1. Spotify acquires The Ringer, adding a big, sporty fish to its pod pond

Primed for pod-ification... Spotify has doubled-down on its podcast offerings. The latest catch: The Ringer — ex-ESPN personality Bill Simmons' podcast network, offering 30 sports pods (+ other topics) and reportedly boasting around 100M monthly downloads. Spotify thinks podcasts are the radio of the future, so it's going in big:

  • Last year: Spotify shelled out over $400M to buy podcast companies like Gimlet (pod producer), Parcast (original shows), and Anchor (DIY pod recording software).
  • By December: 500K podcasts were on Spotify's platform.
  • Today: Its pod-ience (pod audience?) has almost doubled since the start of 2019. More than 16% of Spotify's monthly users listen to podcasts, and that's driving sign-ups for its paid version.
  • Now: It's using the Ringer to up its sports offerings. Because, you know, sports is kind of a popular topic. "We bought the next ESPN" — Spotify's CEO Daniel Ek.

The results are in... Spotify added a record number of paying subscribers for the quarter (11M), and now has 124M total (271M including its non-paying users). But that pod-ification has also cost it big. It lost $85M this quarter, in part thanks to its costly pod-cquisitions.

THE TAKEAWAY

This could mean pod war... Apple is #1 in podcasts, Spotify is #2. But Spotify's got a huge lead in paying ears overall with 124M subscribers compared to Apple Music's 60M. The Ringer pods (like most of Spotify's) will still be available on other platforms, like Apple. But someday Spotify might make them exclusive to its app in a gated audio garden — if Apple does the same, it'll be a "choose your side" pod world.

Post

Do it for the 'gram... Or for the $20B. Facebook-owned Instagram brought in that much ad revenue last year, according to Bloomberg and PFWTM (people familiar with the matter). That Insta-ad money represents over 25% of Facebook's total revenue and beats YouTube's $15B (YouTube's parent, Alphabet, just revealed its revenues this week).

  • YouTube: We've all seen (and skipped) the ads before a video. You'd think 2B+ users would mean more ad money for YouTube. Buuut, over half that ad $$$ goes to video creators.
  • Instagram: Doesn't pay creators because it throws ads between friends' Stories and sprinkles them into your feed. Facebook bought Instagram in 2012 for $1B — but since Facebook's now worth $600B and Insta is 25% of its revenues, the 'Gram is arguably worth $150B now.

The whole family... Facebook doesn't disclose revenue for its individual "children," bundling their financial info instead into their so-called "family of apps."

  • Facebook: The old parent, always cracking dad-jokes and sharing pictures of ferns and grandchildren.
  • Instagram: The too-cool-for-school teen child. Super fashionable, always taking Valencia-filtered selfies, and perennially drinking craft coffees while chilling on a white-sand beach.
  • WhatsApp: The cool, foreign cousin that's always studying abroad somewhere and reading Kant.
  • Messenger: The distant aunt that you always forget exists but go to when you need some random specific thing.
THE TAKEAWAY

Focusing on "the family" could be a strategic move... FB's social media dominance is why it's being investigated by the government. Zuck's giant baby could get broken up to restore competition — that could include dropping Insta. Since Instagram generates more ad revenue than NBC, ABC, and Fox combined, Zuck may downplay that alarming fact by keeping Instagram's numbers on the down-low.

What else we’re Snackin’
  • Snoozed: Casper cuts its (already slashed) IPO price even further to $12/share — that lowers its valuation down from $1.1B to under $500M
  • Brakes: Tesla shares fell almost 25% from the peak of Tuesday's all-time-high rally
  • Swipey: Match-owned Tinder made $1.2B last year off people paying for premium Tinder subscriptions (unlimited swipes, more profile views)
  • LinkedOut: The CEO of Microsoft's-LinkedIn is stepping down after 11 years helping recruiters message you (endorse him for "social networks")
  • Away: Vodafone, Earth's 2nd largest mobile operator (huge in Europe), will remove Huawei equipment from the core of its mobile networks on Chinese spy worries

Sign up for Robinhood, our commission-free investing app, and get a free stock. Already on Robinhood? You'll still get a free stock for getting a friend to sign up (they'll get one too).

Snacks Daily Podcast

Chipotle is the Prince William to Taco Bell's Prince Harry — One's more premium, one's more fun. The new Chipotle CEO used to be a Doritos Locos guy, so he brought Taco Bell hackiness with him.

Learn how the Taco-Bellification of Chipotle boosted sales at each store by 13% on Snacks Daily, our 15-minute pod.

Thursday

Disclosure: Authors of this Snacks own shares of Spotify and Apple

ID: 1082146

Subscribe to Robinhood Snacks

Our Editorial Principles
Robinhood Financial LLC and Robinhood Crypto, LLC are wholly-owned subsidiaries of Robinhood Markets, Inc. Equities and options are offered to self-directed customers by Robinhood Financial. Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org. Cryptocurrency trading is offered through an account with Robinhood Crypto. Robinhood Crypto is not a member of FINRA or SIPC. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC insurance.

Getting “early access” to options or Web is defined as signing up with a valid email address for a spot in Robinhood Financial’s respective waitlist queues for Web or for options. Getting “early access” to Robinhood Crypto is defined as signing up with a valid email address for a spot in Robinhood Crypto’s waitlist queue. Early access to the waitlist for Web, options, or Robinhood Crypto should in no way be construed as confirmation that a brokerage account with Robinhood Financial has been opened or will even be approved for opening. Priority may be given to Robinhood Gold subscribers and existing customers of Robinhood Financial.

Free trading of stocks and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities via mobile devices or Web. Relevant SEC & FINRA fees may apply. Please see the Fee Schedule.

Robinhood Financial is currently registered in the following jurisdictions. This is not an offer, solicitation of an offer, or advice to buy or sell securities, or open a brokerage account in any jurisdiction where Robinhood Financial is not registered. Additional information about your broker can be found by clicking here.

Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, experience, risk tolerance, and financial situation. For more information please see Robinhood Financial’s Margin Disclosure Statement, Margin Agreement and FINRA Investor Information. These disclosures contain information on Robinhood Financial’s lending policies, interest charges, and the risks associated with margin accounts.

Investors should consider the investment objectives and unique risk profile of Exchange Traded Funds (ETFs) carefully before investing. ETFs are subject to risks similar to those of other diversified portfolios. Leveraged and Inverse ETFs may not be suitable for all investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies.

Although ETFs are designed to provide investment results that generally correspond to the performance of their respective underlying indices, they may not be able to exactly replicate the performance of the indices because of expenses and other factors. A prospectus contains this and other information about the ETF and should be read carefully before investing. Customers should obtain prospectuses from issuers and/or their third party agents who distribute and make prospectuses available for review. ETFs are required to distribute portfolio gains to shareholders at year end. These gains may be generated by portfolio rebalancing or the need to meet diversification requirements. ETF trading will also generate tax consequences. Additional regulatory guidance on Exchange Traded Products can be found by clicking here.

Options transactions may involve a high degree of risk. Please review the options disclosure document entitled the Characteristics and Risks of Standardized Options available through https://about.robinhood.com/legal or https://www.theocc.com to learn more about the risks associated with options trading.

The cash management program is expected to be offered by Robinhood Financial LLC. The cash management program, when operational, will be an added program to Robinhood brokerage accounts and will not be a separate account or a bank account. Robinhood Financial will provide additional information on the cash management program once it is operational to help customers, including those with “early access,” to determine if they want to add the program to their brokerage account.

Robinhood Snacks newsletters and podcasts reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. They are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security in a self-directed Robinhood account or any other account, and are not an offer or sale of a security. They are also not research reports and are not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinhood Markets, Inc., Robinhood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit or protect against loss. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing. The price of a given security may increase or decrease based on market conditions and customers may lose money, including their original investment. Robinhood Financial LLC, member FINRA/SIPC.

Testimonials may not be representative of the experience of other customers and are not guarantees of future performance or success. Robinhood Financial LLC, member FINRA/SIPC.

Third party information provided for product features, communications, and communications emanating from social media communities, market prices, data and other information available through Robinhood Markets, Inc., Robinhood Financial LLC or Robinhood Crypto, LLC are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any financial instrument or cryptocurrency or as an official confirmation of any transaction. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. Any information about Robinhood Crypto on any Robinhood website (including www.robinhood.com and blog.robinhood.com), the Robinhood platform, e-mails, or any other communications, are meant for informational purposes only and are not intended as an offer, solicitation, or advertisement for Robinhood Crypto or any goods or services offered by Robinhood Crypto. The Robinhood website provides its users links to social media sites and email. The linked social media and email messages are pre-populated. However, these messages can be deleted or edited by users, who are under no obligation to send any pre-populated messages. Any comments or statements made herein do not reflect the views of Robinhood Markets Inc., Robinhood Financial LLC, Robinhood Crypto, LLC, or any of their subsidiaries or affiliates.

Investors should be aware that system response, execution price, speed, liquidity, market data, and account access times are affected by many factors, including market volatility, size and type of order, market conditions, system performance, and other factors.

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.

Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not currently backed nor supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. Trading in cryptocurrencies comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. Cryptocurrency trading requires knowledge of cryptocurrency markets. In attempting to profit through cryptocurrency trading, you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in substantial cryptocurrency trading. Cryptocurrency trading may not generally be appropriate, particularly with funds drawn from retirement savings, student loans, mortgages, emergency funds, or funds set aside for other purposes. Cryptocurrency trading can lead to large and immediate financial losses. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a particular cryptocurrency suddenly drops, or if trading is halted due to recent news events, unusual trading activity, or changes in the underlying cryptocurrency system. Several federal agencies have also published advisory documents surrounding the risks of virtual currency. For more information see, the CFPB’s Consumer Advisory, the CFTC’s Customer Advisory, the SEC’s Investor Alert, and FINRA’s Investor Alert.

Robinhood Crypto, LLC has a seller of payment instruments license in Georgia, with reference number 61417.

Robinhood Crypto, LLC has a money transmitter license in New Jersey, with reference number 1803456-C22.

Please note that an Alaska money transmission license does not cover the transmission of virtual currency.

Check the background of Robinhood Financial LLC and Robinhood Securities, LLC on FINRA’s BrokerCheck.

Robinhood Terms & Conditions    Disclosure Library    Contact Us    FAQ

© 2020 Robinhood. All rights reserved.