Re:Netflix is getting huge, but can it get great?
by adventured on Thursday February 15, 2018 @02:03AM
(#16382369)
> That’s not how Spotify played it. Spotify bet the farm on discovery and won
Spotify has a horrifically bad business. They're bleeding to death financially, having never earned a profit in their entire existence; they've burned through billions in financing and are still burning at a similarly high rate. Simultaneously Apple is likely to catch up in subscribers in the near future, diluting the leverage Spotify desperately needs to improve its bargaining situation. Apple can afford to burn billions to bury Spotify (likely force them into a sale/acquisition).
Spotify is in a no win scenario. They'll never have enough margin to earn a profit via licensing all of their most heavily listened-to content. The content owners will perpetually squeeze Spotify. This is the fate that Netflix understood to attempt to avoid, which Spotify has entirely failed to avoid. Meanwhile all of largest competitors to Spotify actually make money (Sirius as one example is very profitable). Spotify's only possible future is in the belly of one of the tech or media giants.
Spotify has a horrifically bad business. They're bleeding to death financially, having never earned a profit in their entire existence; they've burned through billions in financing and are still burning at a similarly high rate. Simultaneously Apple is likely to catch up in subscribers in the near future, diluting the leverage Spotify desperately needs to improve its bargaining situation. Apple can afford to burn billions to bury Spotify (likely force them into a sale/acquisition).
Spotify is in a no win scenario. They'll never have enough margin to earn a profit via licensing all of their most heavily listened-to content. The content owners will perpetually squeeze Spotify. This is the fate that Netflix understood to attempt to avoid, which Spotify has entirely failed to avoid. Meanwhile all of largest competitors to Spotify actually make money (Sirius as one example is very profitable). Spotify's only possible future is in the belly of one of the tech or media giants.