A surprising tailwind emerging for $SPOT

Spotify is the original king of personalization, changing how consumers listen to and discover music.

Just look at its market dominance.

Once you are on Spotify and the platform knows you, it's really sticky...and holds tremendous pricing power.

It's tough to switch platforms -- and why would you, what other platform has a more compelling UX?

Spotify's take on the music "ownership" model disrupted how consumers listen to music...and made them dependent on an ongoing subscription.

But Spotify's newest tailwind has nothing to do with personalization, music discovery, or even its subscription model.

It's rising mistrust in institutions.

The platform is non-political -- it stuck to its guns a few years ago when the Joe Rogan censorship drama tried to cancel the platform -- flash forward a few years and Rogan's podcast remains the most listened to podcast in the world

In fact, podcasts and alternative "news" sites like Spotify have a growing tailwind at their back: mistrust of institutions.

A rise in independent media has also given a boost for these services as traditional mass media has a record low level of trust from Americans, as more and more consumers turn towards podcasts.

Both presidential candidates from this year's election made appearances on popular podcasts, with Kamala Harris appearing on the “Call Her Daddy” podcast, and Donald Trump as well as his running mate J.D. Vance, both appearing on the “Joe Rogan Experience.”

Spotify garnered an enormous audience over the last presidential election circuit, no doubt a boost to ad revenue and subscriptions. But the market knows it. The stock is up +163% YoY, near all-time highs.

So where does it go from here?

Well, metrics show rising interest in its subscription plans, notably its premium family plan that runs ~ $20/month. Despite these elevated costs, we see no significant signs of churn. Cancelation searches are flat YoY.

Mentions show rising interest ahead of the company's annual wrapped campaign, which is personalized to each individual user.

We wouldn't be surprised to see more momentum in the stock from here, but acknowledge it's trading at very high levels and the company is not immune to competition -- (we actually think X may compete a bit in the traditional podcast space).

New Years is an important time for subscription services because many consumers like to trim the fat.

We'll be monitoring cancellation mentions over the next month to better understand if the company has retained its pricing power.

So far, it looks like it will.