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The Zacks Analyst Blog Highlights: Amazon, Apple, Alphabet, Sirius XM and Spotify

Zacks Equity Research

For Immediate Release

Chicago, IL – November 20, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Amazon AMZN, Apple AAPL, Alphabet GOOGL, Sirius XM SIRI and Spotify SPOT.

Here are highlights from Tuesday’s Analyst Blog:

Amazon’s (AMZN) Free Music Service Stirs Up Music Streaming War

Increasing usage of smartphones and Internet has resulted in growth of music streaming services. Additionally, rising proliferation of smart speakers and wearables that enable synchronization with music streaming apps is adding to demand for such apps.

Per a report from ResearchandMarkets, global music streaming space is expected to see a CAGR of 16% between 2019 and 2023.

Moreover, according to a report from Statista, the music streaming market is expected to generate $11.1 billion revenues in 2019. The figure is expected to rise to $13.1 billion at a CAGR of 4.1% between 2019 and 2023. Further, user penetration for 2019 is pegged at 14.7%, which is likely to be 16.1% in 2023.

Tech companies like Amazon, Apple, Alphabet’s Google and traditional media companies like Sirius XM have taken notice of the prospects and are trying to strengthen presence in the space.

Will Amazon’s Aggressive Stance Aid its Market Position?

Amazon has been making every effort to bolster presence in the global music streaming service, which is currently dominated by Spotify, by strengthening Amazon Music service.

The company’s launch of ad-supported free version of Amazon Music on iPhone, Android and Fire TV, is the testament to the same. Notably, previously Amazon Music was available for free only on Echo speakers.

With this move, the company will be able to reach audience, who are not willing to pay subscription fee to listen to songs. Consequently, this will help Amazon in gaining further in the market.

Further, free Amazon Music is likely to give a tough competition to Spotify, Google, Apple and Sirius XM, which are leaving no stone unturned to capitalize on the opportunities.

Furthermore, solid momentum across Amazon Prime is benefiting the company in music streaming market. Per CNBC, Prime members have an access to over 2 million ad-free songs.

Apart from free music service, Amazon recently came up with a new version of its music streaming service based on High Definition (HD) music quality, called Amazon Music HD. The service supports various devices such as desktop, selected Echo devices, Fire TV, Fire Tablets and smartphones based on both iOS and Android.

Currently, Amazon carries a Zacks Rank #3 (Hold).

Is Spotify in Trouble?

Following the introduction of free Amazon Music, shares of Spotify plunged 4.9% on Monday.

We note that Spotify, which is riding on strong promotions in the United States and Canada, offers free music streaming service alongside its premium service. Additionally, the company is benefiting from the synchronization of its music streaming service with Google smart speakers.

Reportedly, Spotify has 248 million monthly active users, which includes both paid subscribers and ones who avail free service. Further, user base is expected to be between 255 million and 270 million in the current quarter.

Additionally, this Zacks Rank #2 (Buy) company has set up a strong conversion pipeline from free listeners to paid subscriber on the back of its robust playlists. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Should Apple Worry?

Apple has been gaining steam in the market with the expanding Apple Music subscriber base, which currently has more than 60 million paid subscribers.

Further, its availability on Google Play is a major positive. Apple Music’s availability on Amazon Echo devices is expected to expand the iPhone maker’s footprint further in the music streaming space. Additionally, the iPhone maker is gaining from its tie-up with Verizon.

However, Amazon’s free music service poses a significant threat to the company’s market share. Notably, Apple, which carries a Zacks Rank #3 (Hold), has no free version of Apple Music.

How Google & Sirius are Placed?

Google has been making advances in this market over the past few years.

The company’s on-demand music streaming service, YouTube Music, is driving momentum in the market by leveraging the popularity of YouTube and capabilities of its ML techniques. Notably, the service is currently available in 77 countries, which is bolstering its presence in global music streaming space.

Further, in terms of free music, this Zacks Rank #3 company has recently launched free version of its music streaming service but is still limited only to Google Home speakers.

Meanwhile, Sirius, which carries a Zacks Rank #3, has unveiled more than 100 new curated commercial-free streaming music channels on its streaming platform. This is in sync with its efforts toward delivering enhanced experience to users.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Sirius XM Holdings Inc. (SIRI) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Spotify Technology SA (SPOT) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research