However, some cracks are beginning to show in these streaming titans’ armor.
How long can they hold their crowns?
It won’t come as a shock to anyone that Netflix is suffering from increased competition. Disney+, Paramount+, HBO MAX, Apple TV+, and more have all launched in the past three years to add to existing players such as Amazon Prime.
Netflix, however, never seemed overly bothered by these platforms. It always argued there was more than enough viewing time to go around. That all changed yesterday during its latest earnings call. A throwaway line in the shareholder newsletter mentioned that,
“this added competition may be affecting our marginal growth some…”
Now, a subscriber growth slow-down has sent the company’s stock plummeting as competitors have moved in on Netflix’s territory. The firm’s distinct first-mover advantage is slowly eroding away as streaming becomes a part of everyday life.
Now to Spotify. Things might not look as bleak for the Stockholm-based streaming service, as it still commands a healthy 31% share of the market. This eclipses Apple Music in second-best by more than double.
However, it held 33% of the market in 2020, and 34% in 2019. Amazon Music has grown by 25% in the past year, with YouTube Music expanding by over 50%. The sharks are circling, and Spotify will need to innovate to protect its position.
That’s what it all comes down to — innovation. Dominance means nothing if these companies can’t adapt to an ever-changing world. Netflix has brought out a gaming service, but it has also raised its streaming prices. Spotify has gone all-in on Podcast creation, but is that enough to win the streaming war? Only time will tell.
Financial Writer at MyWallSt
Pádraig’s favorite stock is Nike. Growing up as a sports fanatic, seeing Nike collaborate with athletes like Jordan, Lebron, and Ronaldo inspired him and cemented the brand in his mind. Now, despite having failed miserably in his attempts to earn a fabled Nike sponsorship, he still believes in the innovation and creativity behind Nike and is convinced they will only grow stronger as the world's leading sports brand.