...Spotify Analysis Sarah de Ferrari, Danielle deFerrari Bryce Simantel, & Christine Osazuwa 1 Spotify is a music streaming platform that was founded in 2006 in Sweden by Daniel Ek and Martin Lorentzon with the goal of providing music to everyone. They worked with a Swedish developer experienced with peer-to-peer framework with the intent of connecting the music listener directly to the labels. Due to the nature of that relationship there is a need to negotiate with music labels for launch on a country-to-country basis, starting with their initial launch in Sweden in 2008. They are currently available in 57 countries with a limited launch currently underway in Canada and the Phillipines. The basic service offered by Spotify is the ability for users to create custom playlists that can be played through any internet connection. Spotify has two distinct product offerings, Spotify and Spotify Premium. Spotify Premium members pay a monthly subscription fee but have access to their playlists offline on multiple devices, thus having all the perks of owning the music while just paying $120 a year. Beyond that, Spotify is known for their social media interaction – users can interact with their friends and share playlists, and users can also follow the playlists of their favorite artists. Songs can be found by title, artist, or cd name, and various apps are available to enhance the service, such as radio streaming. Sean Parker, founder of Napster, invested $15M in Spotify...
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...Project Summary Introduction Spotify is an online commercial music streaming platform that, despite earning a massive sum of Euros in 2012, has never recorded any profit ever since its launch in 2008. Royalty costs and increases in licensing costs cover most of Spotify’s expenses, and these fees continue to be a problem as it prevents Spotify from making a profit. Purpose This paper aims to improve Spotify’s strategies in order to make its business more profitable. Method This paper will use secondary data to analyze both Spotify’s external and internal environments. The main tools used here are: PEST, SWOT and the Five Forces analysis. The paper will give insight into Spotify’s pricing and advertising methods, suggesting ways to make it more appealing to the everyday user and how to draw more customers in more efficiently. We will evaluate how long-term subscriptions and bonuses may keep a subscriber loyal to their services. Lastly we will look at how redeveloping their website can make it look more professional as well as make it easier for customers to find out information about Spotify. Conclusion At the end, this paper indicated that Spotify should lower its prices, collaborate with phone operators, reward loyal customers and implement bonus periods, as well as invest in smarter advertising and a better, more professional website. TABLE OF CONTENTS 1. Organization Overview 1.1 General information 1.2 Mission, vision and values 2. Strategic...
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...SPOTIFY An Analysis of Spotify’s Market Strategies Spotify Spotify AN ANALYSIS OF SPOTIFY’S STRATEGY Spotify is a Swedish online music streaming service that was launched in 2008. Since, its launch Spotify has had a meteoric rise and currently boasts a library of around 15 million music tracks and about 20 million users. Though Spotify still lags behind Pandora, the market leader, it is interesting to understand how Spotify managed to succeed in the competitive music streaming industry. The following report will start off by giving a brief overview of the music industry, Spotify’s features and the competition Spotify faces. We will then analyze how Spotify managed to succeed in the competitive music streaming industry. Finally, we will discuss the risks Spotify faces and future strategies it could undertake in continuing its success in the online music streaming industry. DIGITAL MUSIC INDUSTRY The digital music industry can be divided into two submarkets: the streaming market with numerous competitors and the digital download market dominated by iTunes and Amazon. Digital music industry revenues have grown by 8% in 2011 reaching a valuation of $5.2 billion. Currently the streaming market only generates 10% of digital music industry revenue but the growth rate of this market is greater than the growth rate of the download market. Competition within the streaming industry is very strong as many companies operate in this market with similar business models. Companies...
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...pAssignment: Business Modeling Business Modeling Group 1: Thomas Westelaken, Sebastiaan de Monte, Chris Hoedemakers, Daniëlle Peverelli, Teije Oudshoorn Assignment: Business Modeling Group 1: Thomas Westelaken, Sebastiaan de Monte, Chris Hoedemakers, Daniëlle Peverelli, Teije Oudshoorn Assignment: Business Modeling Table of Contents 1. 2. Introduction .......................................................................................................................................... 4 Story ...................................................................................................................................................... 5 2.1. 2.2. The case (spotify) .......................................................................................................................... 5 The business model canvas........................................................................................................... 6 Customer segments (CS) ....................................................................................................... 7 Value Propositions (VP)......................................................................................................... 9 Channels (S)......................................................................................................................... 10 Customer Relationships (CR)............................................................................................... 11 Revenue Streams...
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...History of Spotify Inc. The story behind Spotify’s success is similar to many companies that go on to achieve great things: it dramatically changed the industry, reducing illegal file-sharing. Spotify had been in development since 2006, by a company in Sweden called ‘Spotify AB’. It was founded by Daniel Ek, who was formerly the CEO of Stardoll, and Martin Lorentzon, co-founder of TradeDoubler (Streatfield, 2015). The name Spotify was decided using a combination of the words “spot” and “identify”. The Spotify application was launched on 7th October 2008. Whilst free accounts remained available by invitation to manage the growth of the service, the launch opened paid subscriptions to everyone. At the same time, Spotify AB announced licensing deals with major music labels (The Spotify Team, 2008). In 2009 Spotify capitalized on its popularity by raising $50M and launching the mobile app. Spotify raised a lot of capital early on so it could pay off the record labels and pre-license plays from the major label catalogues. In 2011 Spotify announced 1.3M paid subscribers, 3M active users and it launched in the US. In 2012 Spotify was integrated with Facebook showing what consumers listened to, to their friends. In 2013 Spotify announced 20M active users and 5M subscribers (Streatfield, 2015). In 2014 the company launched discounts for students and family plans, and Taylor Swift removed all of her albums from Spotify due to the low royalties associated with streaming. In 2015 Spotify...
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...1.DEGREE OF RIVALRY Spotify faces a moderately high competition. The number of rivals is seeming to increase as the disruption initially created by the technology seems to settle and competitors start to imitate and accommodate their offerings. The competition is not necessarily in price and tends to balance on the side of the premium services offered. Competitors Profiling Spotify’s biggest rivals are Apple Music — Based on what was before Beats Music. Includes a paid service, a live radio station called Beats 1 and a social component. It is available on over 100 countries and available on Apple devices as well as Android or Windows operated gadgets. The fees charged are $9.99 for a single license or $14.99 for a family license. It does not have a free version, but offers three month trial. Pros: Playlists are made by experts, not algorithms. Apple Music users have access to new tracks and videos uploaded by artists themselves. Has Taylor Swift's blessing, after a reversal on royalty payments. Cons: The features are not wildly different or better than Spotifyàs or Rdio’s so it is hard to justify Jimmy Lovine’s (Apple music excecutive) service will be "revolutionary." But it could still use its clout to bring streaming to the masses. Thus increasing the degree of rivalry in the market to the detriment of overall profitability. Tidal Jay Z bought for $56 million in 2015 and the service is available in over 44 countries. It costs $9.99 a month for normal streaming...
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...app that users download, and then “for $25 a month, members have access to select venues and shows as predetermined by the Jukely team, …for $45 a month, members get the same deal but with a plus one” (Brown). The team partners with music venues within a city to make the shows available to subscribers. Over 90% of users use the app for concert suggestions. They link their account with Facebook and based on their music likes on Facebook, will pair them with shows of similar artists or music who are playing at partnered venues that they think the user will like. The app is innovative and has now launched in over ten cities including New York City, Los Angeles and Nashville. Once they finish funding, they have plans to spread to over 400 cities all over the world. Technology has a huge influence on the music industry, especially when it comes to how the public is consuming music. Physical sales are down, but Spotify just recently hit 15 million paying subscribers each month, with 60 million users altogether. Most would say that it’s much easier to listen to music on the go. It’s easier for people to discover new music as well. They can stream playlists, look at similar artists, and even connect with their friends. We live in a world of people wanting instant gratification and I believe that apps like Spotify and Jukely are delivering that. It’s allowing the public more convenience and is less expensive, but is bad news for the music industry from a financial perspective. Streaming...
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...Case: Apple buys Beats Electronics | | | | | | | | | | | | | | | | | | | | | Word Count of main content: 1187 Introduction In early May 2014, Apple disclosed its intention to buy Beats for US$3 billion and announced the deal completion in early August 2014, welcoming Beats to the Apple family. Apple’s rationale for buying Beats is best summed up by Tim Cook - “Music is such an important part of all of our lives and holds a special place within our hearts at Apple, that’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.” iTunes moved music purchases from CDs to the online platform in 2000. For the first time in 2013, iTunes music sales declined, this downward trend has continued. The fall has been largely attributable to the rising popularity of online streaming music platforms such as Pandora and Spotify. A similar amount of money to buy one track on iTunes can purchase a one month subscription to millions of tracks on Spotify. Beats has a music streaming platform similar to Pandora and Spotify. By merging with Beats, Apple will be able to tap into the music streaming business. However, some analysts doubt whether Apple needs Beats to achieve this, questioning why Apple doesn’t attempt to develop a similar or better streaming platform internally. Speculation has it that Apple is buying the talent of Jimmy...
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...SPOTIFY An Analysis of Spotify’s Market Strategies Spotify Spotify AN ANALYSIS OF SPOTIFY’S STRATEGY Spotify is a Swedish online music streaming service that was launched in 2008. Since, its launch Spotify has had a meteoric rise and currently boasts a library of around 15 million music tracks and about 20 million users. Though Spotify still lags behind Pandora, the market leader, it is interesting to understand how Spotify managed to succeed in the competitive music streaming industry. The following report will start off by giving a brief overview of the music industry, Spotify’s features and the competition Spotify faces. We will then analyze how Spotify managed to succeed in the competitive music streaming industry. Finally, we will discuss the risks Spotify faces and future strategies it could undertake in continuing its success in the online music streaming industry. DIGITAL MUSIC INDUSTRY The digital music industry can be divided into two submarkets: the streaming market with numerous competitors and the digital download market dominated by iTunes and Amazon. Digital music industry revenues have grown by 8% in 2011 reaching a valuation of $5.2 billion. Currently the streaming market only generates 10% of digital music industry revenue but the growth rate of this market is greater than the growth rate of the download market. Competition within the streaming industry is very strong as many companies operate in this market with similar business models. Companies...
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...1. a. The firms for which Spotify’s new business model is a threat are traditional music outlets, like record stores and chain retailers with music sections, and even online retailers like iTunes. Even though record companies have also partnered with Spotify to distribute their music, it is possible that it will cannibalize their other channels of distribution, like brick and mortar retailers and even radio stations. Radio stations, too, will be drastically affected by an increase in the success of Spotify’s new business. While people listening to AM and FM radio, or even Internet radio stations, generate revenue for the radio stations by creating an advertising audience for local and national advertisers, Spotify’s success will certainly steal market share for broadcast listeners. Less obvious examples of businesses that might be affected are television stations, because an increase in control of music choice might increase music listenership and take away from television viewing. b. An example of this from history is how iTunes changed the music distribution model by making brick and mortar sales of music nearly obsolete. Record stores haven’t fared well in the 21st century because of the increase of sales in the iTunes store and other online retailers. c. There are barriers to entry for other firms using the same business concept, because they, too, must negotiate contracts with record labels and figure out a revenue model that pays for the cost of royalties...
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...EvoThe evolution of social media into a robust mechanism for social transformation is already visible. Despite many adamant critics who insist that tools like Facebook, Twitter, and YouTube are little more than faddish distractions useful only to exchange trivial information, these critics are being proven wrong time and again. Simon Mainwaring (2011). For several decades music could only be heard by either buying a single or an album from the local record shop, listening to the radio or going to watch a live gig. There was a time that it would be a special occasion to take your Vinyl or CD home and play it through a sound system. Those days seem so very long ago now. In more recent years, through the evolution and growth of iTunes, YouTube and technology in general, there are many new ways of listening to music. Thanks to modern technology, we now listen to music on a verity of different platforms such as our computers/laptops, phones, iPods and even home gaming devices. We can now listen to music 'on-the-go' and that means we aren't confined into listening to music in certain circumstances - i.e., sitting in front of a CD player. We listen to music how, where and whenever we want to. Over the past decade, this has become normality and is how the majority of the world listens to music, proving extremely popular to millions of people. In 1999, ‘ Sean Parker’ and ‘Shawn Fanning’, two 18-year-old college students, changed the music industry forever with their file-sharing...
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...Is Said to Weigh Investment in Spotify Service By Andy Fixmer and Duane D. Stanford on October 11, 2012 * Tweet * Facebook * LinkedIn * Google Plus * 0 Comments * Email * Print More from Businessweek * * Odd Jobs: The Picasso of Parking Lots * * Post-Debt Crisis, No Consequences * * The Other Affirmative Action Battle: Thomas v. Wells * * The World's First 3D-Printed Guitar * * Algae Are a Growing Part of San Diego's Appeal Companies Mentioned * KO Coca-Cola Co/The * $38.23 USD * 0.12 * 0.31% * GS Goldman Sachs Group Inc/The * $120.2 USD * -1.79 * -1.49% Market data is delayed at least 15 minutes. Company Lookup ------------------------------------------------- Top of Form Go Bottom of Form Coca-Cola Co. (KO) is in discussions to invest about $10 million in Spotify Ltd., the subscription music-streaming service, according to two people with knowledge of the discussions. An agreement isn’t assured, said one of the people, who sought anonymity because the talks are private. An agreement may be reached in the next few weeks, Sky News reported yesterday, citing people close to the beverage company. Coca-Cola, owner of the world’s most-valuable brand, has increased its ties to entertainment so it can market products to young consumers in a subtle way. The Atlanta-based company reached a deal in April to add Spotify to its Internet marketing, after...
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...Benedictine University International Marketing INTB 350 A Proposal For Spotify To Open a Fully-Owned Subsidiary in Canada By Michael T. OSTROWSKI Vincent PETRINI-POLI December 9, 2013 Senior Lecturer Table of Contents Introduction 2 About the Author 3 Spotify 4 The Spotify Service 8 Target Markets 11 Comparison Matrix 15 Entry Strategies 20 Market Responsiveness vs. Cost Responsiveness 22 Financial Aspects 24 Conclusion and Recommendations 26 Exhibits Ex. 1 – Resume 27 Ex. 2 – Company Information 30 Ex. 3 – Service Information 31 Ex. 4 – Country Information from Cia.gov Canada 34 Russia 35 Japan 36 Ex. 5 – Cultural Aspects 37 Ex. 6 – Country Selection Matrix 37 Ex. 7 – Political/Economic Risks Diagram 38 Ex. 8 –Entry Strategies 39 Ex. 9 – Cost Responsiveness vs. Market Responsiveness 39 Ex. 10 – Financial Aspects 40 Ex. 11 – Internet/Media Excerpts 41 Ex. 12 – Power Point Presentation 43 Bibliography 44 Introduction As the world population continues to grow, technology continues to progress, and innovation starts to reach new heights, the need for globalization increases every day. Thanks to advances in modern communication, production is now a global process and aims to reach new consumers across...
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...Marketing Jennifer Willoughby, Co-VP of Service Marketing Date: December 5, 2014 Subject: Spotify Services Report 2014 Mr. Daniel Ek, The music streaming industry is extremely competitive; however, Spotify has managed to carry on as one of the top providers for music streaming, as well as increase their number of users exponentially over the past few years. Spotify stands out against their competition based on: * Well-known brand * Size of music library available * All of the music is stored in the cloud, allowing instant access * Website is easily navigated when searching for artists, albums, and tracks * Ability to customize and share playlists * Spotify’s high ethical standards and everything we do is legal * Free option with advertisements or pay $9.99 per month to avoid the interruptions. * Premium subscription allows users to use Spotify offline * Variety of applications that users can download to their home page leading to more possibilities and uses. * Can be used on a variety of different devices * User traffic has increased by 118% over the past 12 months (Sasson) Spotify is in a great position in the music streaming industry; however, there is always room for improvement. At Spotify, we want to be the best in the industry, while staying legal and ethical. After doing extensive research and evaluating Spotify, we have found the following weaknesses: * Limited offline use when using the free subscription...
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...declined to 210 million in comparison to 1.2 billion in 2008. [3 Sherwin] It seems that music companies finally found some efficient ideas to overcome illegal downloaders. Do music companies actually increase their profits? And how did music companies start adjusting the situation? The purpose of the research paper is to figure out the main reasons why music sales finally increased, any differences to market music products and if the situation of music companies and musicians has improved or not. Findings * Development of Music Stream Services Rather than regarding Internet as a “main virus” of sales declination, music companies use digital media to expand their business. Launch and growth of music streaming services, mainly Spotify, has caused significant loss on illegal downloading service. Before launching...
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