Citi Analyst Says Spotify’s Podcast Pivot Driving Little Growth

Spotify’s podcast push is’t going as planned, say Wall Street analysts.

According to CNBC, Citi analysts downgraded Spotify stock to sell from neutral on concern that the company’s pivot to podcasts may not be working as well as investors hoped.

“Among four subscription based stocks – Spotify, Roku, Netflix, and SiriusXM — Spotify is the only firm where the Street’s long-term forecasts (through 2023) do not comport to the prevailing valuation,” Citi said. “We suspect this disconnect stems from recent enthusiasm around Spotify’s recent podcast pivot.”

Spotify kicked off its podcast-growth initiative in early 2019, buying podcast studios Gimlet Media and Parcast, and podcast self-publishing platform Anchor — paying nearly $400 million USD for them, with additional potential payouts over four years.

It has also spent millions on original and exclusive podcast content. Last fall, it secured exclusive rights to “The Joe Rogan Experience,” the hugely popular and controversial show. Spotify also had inked multiyear podcast pacts with the Obamas and Prince Harry and Meghan Markle’s Archewell Audio, as well as development deals with Kim Kardashian West, Warner Bros. and DC Comics, and the Duplass Brothers.

“If we were to see a material positive inflection in app downloads or Premium subs (from higher gross adds or materially lower churn), we would alter our view,” Citi said. “But, our fear is that if podcasting doesn’t provide a way for Spotify to shift away from music label dependence, the Street may reassess the underlying value of the business. And, that would be bad for Spotify’s multiple and equity value.”

Spotify has also struggled to produce consistent profits, with losses per share outweighing gains, according to data compiled by That said, revenue has been inching higher over the quarters, and is expected to bust through $2 billion for the three months ended in December.