Everybody knows Sony (NYSE:SNE). The Japanese entertainment and consumer electronics giant is a household name. It's a giant of several industries. It's a veteran with decades of business experience.

It's also a dubious investment idea.

I would much rather own music-streaming specialist Spotify Technology (NYSE:SPOT) than Sony, any day of the week. Let me show you why.

Close-up photo of two businessmen's hands, locked in a bout of arm wrestling.

Image source: Getty Images.

What's wrong with Sony?

Sony is a diverse collection of business ideas but I'm not terribly impressed by most of them. In a relatively normal year such as 2019, Sony suffered sliding sales in game and network services and another revenue drop in electronic products. Those are the company's largest divisions and negative trends in both adds up to bad news. Sony Pictures is barely profitable and the music studio posted negative operating income last year. All told, Sony's total sales fell 5% and operating income declined at the same rate.

Sony is setting multi-year highs even though its business model ran out of rocket fuel many years ago. Sure, the upcoming launch of PlayStation 5 and related games will help but that's a temporary boost with questionable value for long-term investors. It's not like the PlayStation 4 sent Sony's stock (or sales) to the moon, after all. Can you even tell where the PS4 launch fell in these charts?

SNE Chart

SNE data by YCharts

Spoiler alert: the PS4 launched in November of 2013. That event kicked off three years of falling revenues and a flattish stock price arc. I see no reason why the PS5 introduction would fare much better.

At the same time, Spotify is a robust growth stock with a bright future.

What makes Spotify a better investment?

Spotify is smaller and largely unprofitable but the business is growing like a magic beanstalk. You know, the classic high-growth business plan where short-term profits are sacrificed in order to build a much larger user base and rampant sales growth. Here's how Spotify's revenue line compares to Sony's in the three years since Spotify joined the public markets:

SPOT Revenue (TTM) Chart

SPOT Revenue (TTM) data by YCharts

Spotify's ad-supported sales increased by 23% in 2019. The premium subscriber count rose 29% to 124 million and the company's free cash flows doubled. Then, the COVID-19 crisis arrived and accelerated Spotify's business growth in the first half of 2020. The company has a clear plan in place to support future growth, based on the popular family plan and supported by a ton of exclusive deals with content creators in the podcast sector.

This company is pushing a massive flywheel to boost its growth prospects at the ongoing dawn of the streaming media era. That's a much better place to put your hard-earned money to work for the long haul.