Spotify's Virtuous Cycle Is Just Getting Started

Spotify (NYSE: SPOT) CEO Daniel Ek described a virtuous cycle around podcasts on several occasions during the company's second-quarter earnings call. Ek's outlook around podcasts echoes comments from its video analog, Netflix (NASDAQ: NFLX).

In 2013, Netflix executives said they'd view long-term success as "having substantially larger revenue [versus competitors] and therefore sustainable increasing content, tech, and marketing spending, leading to further growth, and a virtuous cycle."

Indeed, Netflix has proven that cycle works very well over the last seven years, growing its subscriber base while increasing pricing. Spotify is hoping podcasting will create a similar virtuous cycle as it attracts listeners and creators while improving its monetization.

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Source Fool.com