Spotify & Netflix: Are They Really In the Same Boat? — Our Latest Podcast

Both are stand-alone, dominant streaming platforms in their respective arenas, with more than 100 million subscribers each.  But Spotify and Netflix are ultimately similar fish swimming in very different ponds.

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If you’ve spent any time in the music industry, you’ve undoubtedly focused some mental energy on Spotify.  And the more you pick Spotify apart, the more you start to draw comparisons to Netflix.

The similarities are unmistakable.

Both have spent billions achieving market-leading positions in both the music and video streaming industries.  Remarkably, both have done it without the backing of billion-dollar corporate parents.

Instead, Spotify and Netflix are stand-alone champions being doggedly chased by multiple billion-dollar corporate competitors.  In the case of Spotify, both Apple and Amazon are breathing down the company’s neck, with Apple Music already establishing a lead among paying subscribers in the U.S.

And don’t forget Google/Alphabet, which is already beating Spotify’s free userbase with YouTube, while also trying to compete on the paid side with Google Play Music and YouTube Music.

As for Netflix, the competitive pressure is even more intense.

Disney is putting nearly all of its corporate energy behind Disney+, a streaming video platform which debuts later this year.  And so are other billion-dollar behemoths like Amazon Prime Video, AT&T/WarnerMedia, Apple, Google (via YouTube TV), and Sony, just to name a few.

Even Walmart is making a play in the coveted ‘SVOD’ (Subscription Video on Demand) space.

In fact, the competitive landscapes across both music and video are moving faster than most can keep tabs on.  Which is why media tech investor/analyst/advisor Peter Csathy wrote Fearless Media, a 300+ page book devoted entirely to the shifts in the media space — in 2018 alone!

That’s right, there’s enough to fill an entire book with major developments across SVOD, music, and related fields like AR — for just one year.

But this book is already going out of date.

So what does Csathy — who intently covers the TV, film, music, and VR space — think about the similarities between Spotify and Netflix?

Csathy agrees that both stand-alone companies are maintaining leads over a ferocious pack of mega-corporations (see above).  But these are ultimately similar fish swimming in radically different ponds.

“There are fundamental differences between the video and music worlds,” Csathy said during a broader interview on the Digital Music News Podcast.

For starters, the music and video industries treat content in entirely different ways.  Spotify tried exclusives — and so did Apple Music and Tidal.  But major rights owners like Universal Music Group pushed back, excoriating the practice and ending the streaming album exclusive for good.

Netflix, on the other hand, is all about content exclusives.

In fact, the reason why Netflix is spending billions on developing originals is that licensing video is so difficult.  Even worse, mega-competitors like Disney have withdrawn their content, hoping to handicap Netflix in the process.

“Several years ago, the major media companies started limiting their content; they became more challenging on the licensing front,” Csathy relayed.  “That’s why Netflix got into the game of originals in the first place.”

But Csathy said that Disney, WarnerMedia, and others are now taking things to another level by removing their content entirely.  On top of that, the competitive climate is getting more intense, with behemoth rivals rapidly entering the space.

That’s much different than music.

“Seemingly every week, there’s a new SVOD service that’s coming into the marketplace,” Csathy said.  “On the music side, you don’t have an expansion.  You almost have a contraction in the number of music services that are out there.”

But driving these differences are the core formats themselves.

Music and video are apples and oranges in the end, despite their seeming similarities.  “You listen to music over and over again, whereas with video you don’t do that as much,” Csathy observed.

Here’s our full interview with Peter Csathy, where we cover the entire media landscape over the past year — including SVOD, streaming music, VR, and immersive live concerts.

Enjoy! (and subscribe…)

One Response

  1. Wade SF

    I have heard whispers of Netflix launching an audio streaming service next year. Any truth to that?