For music, institutional investors basically have Spotify or Vivendi. Netflix’s loss in market cap shows that even the golden child of streaming does not deliver enough promise for many of those investors, but investors have plenty of other TV industry bets to make if they abandon Netflix. Lots of institutional investment has flowed into Spotify since it went public – and indeed prior to that, but music is a tiny part of those investors’ portfolio. Netflix of course plays in a much bigger market than Spotify: the US video subscription market will be worth $17.3 billion in 2018-the same amount that the IFPI estimates the entire global recorded music business generated in 2017. Such is the life of a publicly traded tech company.īut perhaps the most telling part of Netflix’s stock performance was that the $9.1 billion of market cap it lost is more than a quarter of Spotify’s entire market cap ($ 33.3 billion on Tuesday). With Spotify’s Q2 earnings due later this month, it will be bracing itself for another potential drop in stock value if its performanceis good but not good enough to keep ambitious investors happy. What it failed to do was meet the ambitious expectations it had set. Netflix also registered a net operating profit.
To be clear, Netflix had a strong quarter, continuing to grow strongly in both the US – a much more saturated market for video subscriptions than for music – and internationally.
On Monday (July 16 th), Netflix’s quarterly earnings missed targets, resulting in $9.1 billion being wiped off its market capitalisation due to twitchy investors jumping ship.
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