SPOT

Spotify Expands into Eastern Europe and Russia

There are 195 countries in the world, and as of this week, you can listen to Spotify (NYSE: SPOT) in almost half of them.  

Yesterday, Spotify launched its service in 13 new eastern European markets: Albania, Belarus, Bosnia & Herzegovina, Croatia, Kazakhstan, Kosovo, Moldova, Montenegro, North Macedonia, Russia, Serbia, Slovenia, and Ukraine. The new additions bring the number of nations in which Spotify offers service to 92 and adds 250 million potential listeners to Spotify's total addressable market.  

Magnifying glass held over map with a handwritten Moscow EUROPE

Image source: Getty Images.

Russia is the highest profile country among the new additions. Facing ongoing economic sanctions by the U.S., Russia's economy contracted for three straight years from 2013 through 2016, before returning to growth through 2019. Like many countries, Russia's economy plunged along with the broader global economy when coronavirus struck earlier this year.  

Nevertheless, Spotify sees opportunity in Russia, which it describes as "the 17th-biggest streaming market in the world and on pace to be the 10th-biggest streaming market by 2030." According to Spotify, 87% of music listeners in Russia use streaming services compared with a 61% average globally.

Spotify will now begin offering both free (to attract potential paying customers) and premium (i.e. paid-for) services in these new markets. This is a continuation of the company's goal of international diversification. Although the United States is currently Spotify's most lucrative market, producing $2.9 billion in revenue last year according to data from S&P Global Market Intelligence, markets outside the U.S. are already a much larger part of Spotify's business, producing revenues of $4.7 billion -- 62% of the total.

With this week's news, Spotify's global revenue is only going to grow.

10 stocks we like better than Spotify Technology
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Spotify Technology wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of June 2, 2020

 

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Spotify Technology. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.