3 ms·
Even more impressive than the market cap previously referenced is their actual business is vastly superior to Spotify. Sirius 2019: $7.8b in sales, $1.7b opera
by adventured 7y ago
Even more impressive than the market cap previously referenced is their actual business is vastly superior to Spotify.
Sirius 2019: $7.8b in sales, $1.7b operating income
Spotify 2019: $6.7b in sales, -$73m operating income
Spotify's market cap is supported by a fantasy that one day, somehow, if they get big enough they might generate a real profit to support their Wile E. Coyote valuation (don't look down). So for example, if they get to $20 billion in sales (in another 10 years), maybe they'll spit off as much profit as Sirius does right now in exchange for a similar market cap.
- JohnJamesRambo 7y agoMan, I did not know these facts. I would have never guessed.
- dna_polymerase 7y agoSpotify has solid user growth, and just invested heavily in the podcast ecosystem. Also they just reintroduced 3-month trials for their subscriptions which slows conversion and therefore revenue growth. Of all the tech companies out there, I think Spotify ranks among the more solid ones.
- hardtke 7y agoCompared to Spotify, SiriusXM has lower content costs (favorable statuatory licensing rates and a larger fraction of exclusive owned content) and a better user demographic (wealthy middle age Americans). Their churn rate is negligible.