Netflix’s video-streaming service has been thriving for so long that other companies are striving to duplicate its success in other kinds of digital entertainment and content.
Spotify’s music-streaming service has emerged as the most celebrated of the aspiring clones, despite significant challenges that will make it difficult to keep growing at the same pace as Netflix has been in video streaming.
The biggest difference between Netflix and Spotify boils down to their ability to separate themselves from the rest of the pack.
Netflix has firmly established its service as a staple in tens of millions of households around the world by pouring billions of dollars into a slate of original programming that can’t be watched anywhere else.
Popular shows such as “Stranger Things,” ”House of Cards,” and “Black Mirror” have enabled Netflix to keep attracting millions more subscribers each year while cultivating enough customer loyalty to be able to gradually raise its prices. That leverage allows Netflix to spend more to acquire the rights to TV series and films while also remaining profitable.
In contrast, Spotify is selling consumers access to an extensive catalog of digital music that is largely the same as the libraries available at the same $10 monthly price on rival music streaming services from Apple, Google and Amazon, three larger companies with far more resources.
Netflix demonstrated how well its formula works again Monday with the release of its first-quarter earnings. The Los Gatos, California, company added another 7.4 million video-streaming subscribers during the first three months of the year, ending March with 125 million throughout the world, including nearly 57 million in the U.S.
The performance exceeded management and analyst projections to the delight of investors. Netflix’s stock climbed more than 5 percent to $324.10 in extended trading.
Spotify eventually could build a unique collection of content too, but there is no clear…