Netflix, Inc’s share price crash has pulled down other media stocks emulating the streaming giant’s moves. Spotify Technology S.A. valuation is also losing its mojo even before Netflix’s crash, the Financial Times wrote.
Spotify’s market capitalization is about twice its 2021 revenue, while Netflix’s market cap is about three times its 2021 revenue.
Spotify and Netflix, pioneers of streaming in their respective industries, have millions of subscribers and built globally famed brands. Both were under pressure to drive subscriber growth globally, as their stock prices relied on the development.
While both companies seem to have a similar model, the interim working is different. FT notes that music is highly concentrated, with Just four entities controlling 80 percent of Spotify’s music catalog, while multiple studios produce for TV for Netflix.
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