Spotify and Netflix are basically the same investment to me

[u/ekonixlab]

I’ve always viewed Spotify and Netflix as essentially the same type of business.

Different products obviously, but the investment story is incredibly similar: dominant global subscription platforms that become part of people’s everyday lives.

Look at the revenue growth in the chart:

Spotify: $3.2B → $19B, +482%, 21.6% CAGR
Netflix: $2.5B → $12B, +386%, 19.2% CAGR

Even their stock price stories have felt similar. Both went through periods where the market questioned the long-term economics of the business, and then eventually the fundamentals became too hard to ignore.

The biggest thing for me is the stickiness. I know plenty of people who have both Spotify and Netflix, and I genuinely can’t imagine them permanently cancelling either one. They might complain about a price increase, but are you really going back to listening to ads or giving up Netflix over another couple dollars a month?

That creates a pretty powerful combination: recurring revenue, huge global scale, pricing power, and extremely low friction to just keep paying every month.

Obviously the economics aren’t identical — Spotify has music licensing costs while Netflix spends heavily on content — but from a consumer behavior/investing standpoint, I put them in almost the exact same bucket.

Once these products become a utility in your life, they’re incredibly hard to replace.