Spotify Technology SA (SPOT) is acquiring the music recognition trivia game Heardle, as it looks to make its app more interactive. The streaming giant sees the trivia game as more of a tool for musical discovery, which should help users rediscover old tracks and discover amazing new artists. According to CNBC, the acquisition will allow the company to diversify its revenue stream as it continues investing in video, live streaming, and podcasts.
SPOT Is Banking on Heardle’s Growing Popularity
Heardle is a challenging game that allows players to guess a song based on the opening notes. The game has proven to be a fun way of connecting millions of fans with songs. Consequently, it should help bolster engagement levels on Spotify. In a press release, Spotify said that it will integrate Heardle and other interactive experiences to make it easy for music lovers to connect more deeply with artists and friends.
To ensure that people continue to use the service, Spotify has confirmed that Heardle will continue operating as a standalone game and it will also remain free for players. Players will be allowed to listen to the full song on Spotify once they finish the game. Although the game will be available in the U.S., UK, Ireland, Canada, Australia, and New Zealand, there are plans to expand it to other markets.
The loyal following that the game has built is what Spotify is banking on to enhance interactivity on the platform and monetize it in the long run. According to CNBC, Spotify CEO Daniel Ek has already confirmed that they are doubling down on music discovery within the app, all in an effort to draw in more users and enhance engagement on the platform.
Wall Street’s Take on SPOT
The Street is optimistic about the stock, with a Moderate Buy consensus rating, based on 13 Buys and 11 Holds. The average Spotify price target of $148.86 implies 49.49% upside potential from current levels.
Bloggers Are Fairly Bullish About Spotify
TipRanks data shows that financial bloggers’ opinions are 68% Bullish on SPOT, compared to a sector average of 65%.
Key Takeaway for Investors
The integration of trivia game Heardle should help Spotify enhance engagement levels on the platform. The millions of people already using Heardle provide an exciting target market that Spotify can monetize.
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