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

For Immediate Release

Chicago, IL – October 6, 2020 – 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, Spotify SPOT and Alphabet GOOGL.

Here are highlights from Monday’s Analyst Blog:

Amazon’s Universal and Warner Deal to Stir Up Music Streaming War

With increasing Internet and smartphone usage, music streaming services offering unlimited and uninterrupted access to high-quality audio files are gaining rapid traction globally.

Further, increasing proliferation of smart speakers and wearables like smartwatches — which can be synchronized with music streaming apps — is driving the demand for such services.

Moreover, according to a report from Statista, the music streaming market is expected to generate revenues of $16.4 billion in 2020. The figure is expected to reach $21.3 billion by 2025 at a CAGR of 5.4% between 2020 and 2025. Further, user penetration in 2020 is expected to be 8% in 2020 and rise up to 12% by 2025.

Tech companies like Amazon, Apple, Spotify and Alphabet’s Google, among others, have identified the prospects and are trying to strengthen presence in this space.

Amazon Latest Stance to Aid Market Position

Amazon has been making every effort to bolster presence in the global music streaming service by strengthening Amazon Music service.

In this regard, Amazon Music recently inked a strategic partnership with Universal Music Group and Warner Music Group to bring an immersive experience for music lovers by remastering songs and albums to Ultra High Definition (HD).

The company plans to upgrade the digital streaming audio quality of these songs to the highest available. Together, the companies aim to help take music to the next level by leveraging the enriched capabilities of Amazon HD quality.  

Users will now be able to stream music from a number of artists including Eagles, Elton John, Linkin Park, Tom Petty, Ariana Grande, Jon Pardi, Shawn Mendes, Lady Gaga, Lil Tecca, Selena Gomez, Post Malone and many more. In addition to the above, a few select albums and songs will be remixed in 3D Audio formats such as Dolby Atmos and Sony 360RA.

Last year, Amazon came up with a new version of music streaming service based on HD music quality, called Amazon Music HD. The service supports various devices such as desktop, select Echo devices, Fire TV, Fire Tablets, and smartphones based on both iOS and Android. With Amazon Music HD, customers can stream 5 million songs in the highest quality.

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

Moreover, the company is likely to witness growth in the user base of the Amazon Music app by delivering enhanced music experience via improving the audio quality. Furthermore, solid momentum across Amazon Prime is aiding the company in the music streaming market.

In addition to the latest deal, last month, Amazon incorporated Twitch’s live streaming feature into the Amazon Music app.

All these endeavors will enable the company to help artists across all genres globally to bolster their fan engagement.

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

How’s Spotify Placed?

Spotify, which is strongly focused on personalization of playlists to deliver enhanced music experience, is witnessing strong momentum across the premium subscriber base.

According to a report from Statista, Spotify had 138 million premium subscribers worldwide at the end of second-quarter 2020, up from 108 million in the year-ago period. The subscriber base has more than doubled since early 2017.

We note that Spotify offers free music streaming service alongside its premium service. Additionally, the company is benefiting from synchronization of the music streaming service with Google smart speakers.

Further, its acquisition of Ringer remains noteworthy. Ringer produces more than 30 podcasts from Simmons.

Additionally, this Zacks Rank #3 (Hold) company has set up a strong conversion pipeline from free listeners to paid subscribers on the back of 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 expanding Apple Music subscriber base, which currently has more than 60 million paid subscribers. Also, the company has expanded the Apple Music platform’s reach to additional 52 countries in 2020.

Also, recently, the company relaunched the Apple Music beta website to add a Listen Now feature that replaces the For You tab from the standard Apple Music website. The interface allows subscribers to stream their favorite music from their Internet browser rather than installing iTunes or the separate Apple Music app.

Moreover, this Zacks Rank #3 company offers about 50 million on-demand songs and live radio stations. The streaming service costs $10 per month.

However, Amazon’s new deals could pose a significant threat to the company’s market share.

How’s Google 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 ML techniques. The service is currently available in more than 90 countries, thereby bolstering its presence in the global music streaming space.

Recently, the company announced that it will unveil a feature called ‘Explore’ on mobile apps first and then roll out the same for the desktop. The new feature will help Google attract new users and bolster the subscriber base. This, in turn, will accelerate revenue generation within YouTube in the near term.

Further, in terms of free music, this Zacks Rank #3 company offers a free version of its music streaming service, which is a big positive.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

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