Netflix, Inc. (NASDAQ:NFLX) and Spotify Technology S.A. (NYSE:SPOT) have built two of the world's biggest subscription businesses, but they've done so in very different ways. Netflix's advantage comes largely from its scale and the amount of content it can offer. Its huge subscriber base allows it to spread the cost of making and licensing shows and movies across hundreds of millions of people, while that scale gives it more room to keep investing in the service. Spotify's advantage is more personal. The more people use the platform, the more it learns about their tastes and listening habits, which can make the experience better and harder to replace over time. That difference matters. Netflix has to keep spending to maintain its advantage.
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