Spotify may have wider appeal than Netflix

According to an MKM analyst, Spotify may have a wider appeal than Netflix. They expect a market capitalization of 35 billion and a 2.2 billion net profit by 2022, contingent on the company cutting costs of their content. The Wall Street Journal currently values Spotify at 8.5 billion with a non-GAAP net loss of 520 million in 2016. Their recent acquisition of Medichain (a blockchain technology company) may help cut down on these content costs which consist of 68-69% of total revenues.

Their claim is based on a successful rate of 70% of customers subscribing to their premium service, as well as a positive climate for international growth. Spotify was able to add 20 million new customers in fiscal year 2016 compared to 18 million in Netflix's best year.

Do you think we will see a Spotify IPO before the end of the year? Will Spotify surpass the size of Netflix? Let me know what you think.