Tag Archives: “add to spotify”

Spotify- Grant Nygaard

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Grant Nygaard

 

Headquarters (1)

Research & Development

Spotify AB
Birger Jarlsgatan 61, 10tr
113 56 Stockholm
Sweden
556786-5729

Main Headquarters

Spotify Ltd.
4th Floor
25 Argyll Street
London W1F 7TU
United Kingdom

USA Headquarters

Spotify USA Inc
45 W. 18th Street
7th Floor
New York, NY 10011
USA

http://www.spotify.com/

Key Executives (2)

Barry McCarthy- Chief Financial Officer

Daniel Ek: CEO & Co-Founder

Daniel Ek: CEO & Co-Founder

Martin Lorentzon- Co-Founder and Chairman of The Board

Steve Savoca-Head of Content

Steve Savoca-Head of Content

Gustav Söderström- Chief Product Officer

Overview (Clip courtesy of Vimeo)

Spotify is a commercial music streaming service based in Stockholm, Sweden that provides licensed, label-approved content to consumers using a “freemium” business model (4). Launched in October, 2008 by Swedish entrepreneurs Daniel Ek and Martin Lorentzon, the privately held company has amassed over 75 million users in just 7 years, 20 million of which subscribe to the premium service (3).  Available on Mac, Windows, smartphones, tablets, and Smart TV’s, Spotify revolutionized how users could access the world’s music from any platform. By providing a cost-effective, accessible alternative to piracy, Spotify has changed the landscape of engaging with music content.

Financial Information and Revenue Model

Spotify is a privately held and funded company that has no plans of going public as of now, but they have CFO Barry McCarthy on the board, who helped make Netflix a public company, so that may change in the near future (5). Currently valued at more than 8 billion, Spotify is essentially worth more than the entire recording industry combined, which is around 7 billion (6). In terms of a revenue model, Spotify employs the “freemium” approach, which means that the basic service is free with

advertising interruptions, but users can pay $9.99 per month for an ad-free service that can be accessed offline (4). Also, there is an option for college students to access the premium service for $4.99 a month, making the service extremely

attractive to advertisers looking to target a younger demographic (4). When it comes to paying royalties back to label and music providers, Spotify pays rights holders 70% of all revenue generated.  Royalty payment amounts are based on individual deals that factor in country, artist, and the amount of premium users (4).

Interface

 

An example of Spotify's desktop interface.

An example of Spotify’s desktop interface. (Provided by Spotify)

An Example of Spotify's Mobile Interface.

An Example of Spotify’s Mobile Interface. (Provided by Spotify)

 

Streaming Wars: A Market Fragments

From its release in the U.S, Spotify had dominated the music streaming market with little to no resistance. However, several competitors have begun to pop up, making the market more fragmented than ever. The most notable of these competitors is the recently released Apple Music, which currently boasts close to 15 million subscribers, 6.5

A new competitor has popped up trying to establish market share. Apple Music Logo

of which are paid users of the premium service (6). While this remains a fraction of Spotify’s number, it still is notable due to the fact that the service is less than a year old, and offered a free 3 month premium trial to anyone who signed up. To compete against this, Spotify announced its own trial period, offering 3 months of premium access for just 99 cents (7) .

Another reason Apple was able to grab a share of the market so quickly was its focus on artist-generated content and live curated radio by popular DJs on their “Beats Radio 1” Platform. Boasting celebrity DJs such as Drake and Pharrell Williams to host live shows and create curated content, Apple has been able to get users excited by having exclusive mixes created by artists (8). In response to Beats 1, Spotify has created “In Residence,” a series of podcast playlists curated by the likes of former Sex Pistol Steve Jones and alternative rock band Jungle (9). Although they lack the live component of Beats 1, Spotify hopes to expand this feature to more artists aimed a younger demographic.

 

Personal Curation 

Also in the realm of curated content to compete with Apple, Spotify has scored a hit with its new “Discover Weekly” feature. Launched this quarter, the new addition creates

Spotify has become the most popular streaming service worldwide.

Spotify has become the most popular streaming service worldwide. Courtesy of App Annie

customized 2-hour playlists for users each week based on listening history and habits. Having accumulated 1.7 billion streams since launch, Spotify’s head of product Matt Ogle said the feature has, “Exceeded our expectations.” (10)  This suggestion/discovery model is another reason Spotify has usurped the throne of most popular streaming service from Pandora, the internet radio service, this quarter (11) .

Examples like these show how, even in an evolving market, Spotify has found ways to stay on top when it comes to music streaming through new ways for users to engage with music. This yields results, as they are now able to dominate globally.

 

Spotify and Artists: The Good, The Bad, and The Ugly

This past semester, Spotify has had both positive and questionable interactions with content creators. Here are some notable ones:

The Good: The “Year in Music” (12)

On November 30th, Spotify released its annual “Year in Music” figures to the public, showcasing how Spotify numbers have become a legitimate measurement for success in the industry, and how it can be extremely beneficial for exposing music to a large audience.

In 2015, Spotify users streamed over 20 Billion hours of music across all platforms. Within those 20 billion hours, rapper Drake was the most popular, with 1.6 billion streams and 46 million unique listeners, showing how Spotify has helped his music reach a massive audience. Also, Major Lazer’s track, “Lean On” was named the most streamed track ever, with 540 million plays overall worldwide. Justin Bieber also broke records with his new album “Purpose,” getting 36 million streams on November 13th, the day it was released (available for streaming via Spotify below). These numbers show the power streaming can give the artist, as getting 36 million plays the first day an album was released was virtually impossible in the days of solely physical releases.

The Bad: Adele and 25 Absent on Spotify (13) 

Although numbers for streaming are higher than ever, the projected highest-selling album of the year, English songstress Adele’s “25”, was not put up for streaming on Spotify at

Adele isn’t Spotify’s biggest fan. Courtesy of XL Recordings

her request. Having sold over 4 million copies in the US alone, the album is breaking sales records in an era where album sales are at their lowest point in history. This album would have surely boosted streaming numbers for Spotify and boosted ad sales to target free users. When asked about the lack of streaming for “25”, Adele said, “It probably is the

future, but, eh,” showing her lack of enthusiasm towards the method. To make matters worse, Pandora has exclusive rights to the album, putting the potential revenue in a competitor’s hands.

The Ugly: Victory Records Controversy (14) 

The catalog of indie rock label Victory was pulled off of Spotify after the company inquired with Spotify about inadequate royalty payments. This practice of taking catalogs off the service is ugly because it sets a dangerous precedent for indie labels in a streaming

Victory Records Logo. Courtesy of Victory

climate, who may not have as much leverage to negotiate with Spotify as a major label like UMG would. Marginalizing independent music on Spotify would hurt not only the artists, but create an environment where conglomerates make all decisions.

Hopefully Spotify could expand on positive artist relations while attempting to help others be more comfortable with streaming in the future.

Overview

Spotify has had a tumultuous but overall successful few months, as they navigated an evolving, fragmenting market successfully and have become the de facto music streaming service around the globe. It will be interesting to see how they can deal with a rising Apple Music and recent backlash over royalties and label agreements while still engaging users with curated and personalized content.

Sources

(1) Spotify About Us

(2) Bloomberg Business Company Overview of Spotify

(3) Time Magazine What is Spotify?

(4) Spotify Artists Spotify Explained

(5) Huffington Post Spotify Just Hired The Man Who Took Netflix Public

(6) Digital Music News Spotify now Worth More Than Entire Recording Industry

(6) Wall Street Journal  Apple Music Now has 15 Million Users

(7) Spotify Premium for 99 Cents

(8) BBC Beats 1 Radio Hosts

(9) NME Spotify Introduces “In Residence”

(10) Time Here’s The Story Behind Spotify’s Coolest Feature

(11) Radio and Music Spotify Becomes World’s go-to Streaming Service

(12) Billboard Spotify’s Year in Music

(13) The Verge Adele Admits Streaming is Probably The Future, Still Doesn’t Care

(14) Rolling Stone Spotify Drops Victory Records Catalog Over Disputed Royalties

Spotify

Posted on by 
By Hannah D Friedland
[1]

[1] Spotify’s Logo

THE SPOTIFY STORY:

[6] The most updated visuals of the Spotify application on thee platforms

[2] The most updated visuals of the Spotify application on thee platforms. Users have an on-demand stream of music on their computer, mobile device, tablet, and home entertainment system.

Spotify is a music streaming service that puts users in control of 20 million licensed songs [3]. Spotify was launched in Sweden in 2008 and came to America in 2011.

Spotify is financially a private company that offers over 20,000 new songs each day from major and independent labels including EMI, Warner Music Group, Universal, & The Orchard [3]. Artists earn royalty when their music is played, and there are over 24 million active users currently in 55 markets [3].

There are two revenue streams, free, which is “powered by advertisers” and premium for $9.99 monthly with extra features including no ads, offline, and high-quality audio [3].

TEAM SPOTIFY:

[2] Spotify Founders- Daniel Ek & Martin Lorentzon

[4] Spotify Founders- Daniel Ek & Martin Lorentzon

Chief Sales, Marketing, and International Growth Officer- Jeff Levick

[5] Chief Sales, Marketing, and International Growth Officer- Jeff Levick

 

[5] Chief Content Officer & Managing Director USA- Ken Parks

[6] Chief Content Officer & Managing Director USA- Ken Parks

[7] Head of Content- Steve Savoca

[7] Head of Content- Steve Savoca

 

 

 

 

 

 

 

 

 

INSIDE SPOTIFY:

Social Media Merges with Music- Songs, playlists, and albums can be shared on the Spotify application through the "Send To" message option, or users can "post to feed" to their Facebook timeline, Twitter, and Tumblr within the Spotify application. ARROW

Social Media Merges with Music- Using the “send to”, or “post to feed” options users can message music to friends and post music to their Facebook timeline, Twitter, and Tumblr within the Spotify application. Source:  Spotify

 

Spotify gives its users the option to connect with their social media Facebook, Twitter, and Tumblr accounts. Users can create collaborative playlists, share music, view friends music and more which provides for ample music discovery and publicity for the company on social media platforms. There is also a private session users can activate.

 

 

Two other elements that Spotify includes are apps and Discover. While these apps add dimension to the Spotify journey, Discover is essentially a constantly updated news feed.

Discover- Spotify's "news feed" feature on the desktop application, artists are recommended, concerts nearby are posted, friends listening habits are shown all based on listening habits the user has shown. Source: Spotify

Discover- Spotify’s “news feed” feature on the desktop application. Updates with releases, playlists, artists recommendations, concerts nearby are posted, friends listening habits are shown all based on listening habits the user has shown. Source:  Spotify

COMPETITORS:

Spotify is a strong contender, but it’s competing neck and neck with Rdio, Pandora, Rhapsody, Google Play Music, and Beats on price, catalogue, platforms, and features [8]. Beats Music entered the competitive on-demand music market in January [9], and is Spotify’s biggest challenger.

Beats vs. Spotify

[10] Beats Music vs. Spotify- The two streaming services are extremely similar with the same catalogue size, the discovery element, and price.

Beats entry in the market put Spotify in “go-mode”.

SPOTIFY’S SITUATION:

Competitor streaming services are continually emerging. With more choices presented to consumers, Spotify has responded by shifting their focus to partnerships, acquisitions, customer satisfaction, and updated product development. The formula is to attract users to Spotify, engage with users, and retain them.

Partnerships

Last.fm

Last.fm is a music recommendation service. In January, Spotify and Last.fm teamed up to bring a beneficial on-demand playbar to Last.fm’s website. This makes it possible for Last.fm users to internally play the entire Spotify catalogue on Last.fm’s website [11].

The collaboration works in both companies favor. Last.fm users have a fuller experience with the power, “to play whatever you want by whoever you want directly on Last.fm” [12]. In addition, Spotify’s catalogue incorporation provides a huge presence and Last.fm users conveniently have motivation to signup for Spotify to take advantage of the essential music player.

The Last.Fm playbar

The Last.Fm Spotify playbar at the bottom of Last.Fm’s website. Source:  Lastfm.com

SoundHound

Spotify also joined forces with SoundHound for the “Add to spotify” feature on its iOS application in February. SoundHound is a popular music-recognition app, similar to Shazam. Banded together, SoundHound is now more interactive. After linking accounts, with the tap of a button users can automatically generate Spotify playlists of recognized songs without leaving SoundHound’s app [13]. 

Source: SoundHound & Spotify

Hitting the “Add to Spotify” button automatically turns songs discovered on SoundHound into a Spotify playlist. Source:  SoundHound & Spotify

The mutually-beneficial relationship brings life to identified songs through Spotify playlists on SoundHoud, and the incentive to use the button will drive users to subscribe to Spotify while giving them presence on a music app [14].

Coachella

On top of that, Spotify was presented with an amazing opportunity to have presence on site at Coachella as the Official Digital Music Partner of the Coachella Music and Arts Festival in California in April. The Spotify Social tent was an on-site air-conditioned tent that offered relaxation pods, chargers, a “Mosaic Photo Booth” that uses your Spotify account to generate a picture out of your most played album art, and art from artist Apex [15].

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[16] The Spotify Social tent, that capped at 150, gave people an air conditioning experience filled with music, more battery power, art,  and a Mosaic Photobooth that puts your face on album covers based on your Spotify listening habits.

#WeWereThere was Spotify’s digital interactive strategy at Coachella to “connect, collect, share.” Implanted in every RFID wristband was the power to capture the experience by checking in and collecting custom Spotify curated playlists. The “My Coachella Story” digital snapshot let individuals create memories of their festival concert experiences with playlists gathered [16]. This collaboration not only transformed Coachella goers into premium users, but also created a special experience and built relationships by reliving the festival on Spotify.

[15] “My Coachella Story”- an example of a digital snapshot that shoes distance traveled, the path taken, playlists, artists seen etc. To participate users needed to simply connect their wrist band with their Spotify accounts, look for check ins at the festival, use the wristband to collect playlists and then after generate their digital card and share it with family and friends.

Sprint

Lastly, Beats launched with an AT&T package family plan deal. Rumors are circulating about Spotify planning to bundle with the #3 U.S. mobile carrier, Sprint [17] in April. This partnership will give Sprint customers a free trial. Customers will be able to pay for Spotify directly through their Sprint Accounts, which will help Spotify secure a greater market share and Sprint secure more data plans. Sprint and Spotify will announce the details on April 29th at a New York Event [18].

Acquisitions

In efforts to boost the “discovery” element, Spotify acquired The Echo Nest in March [19]. The Echo Nest is a music intelligence company that examines listening behavior and makes musical recommendations. Spotify paid $100 Million, with 90% Spotify equity [20]. The Echo Nest previously powered Rdio and Rhapsody, both of which ended their deals, deeming its technology invaluable to their operations right after Spotify acquired [21]. This potentially puts Spotify in the position to take The Echo Nest away from competitors.

Combing the two companies gives The Echo Nest a bigger audience and catalog, while Spotify, now with music-discovery data, will improve recommendation’s.

Customer Satisfaction

With intentions to obtain more paying users Spotify has updated its business model. In January the company announced free music shuffling on iOS with a catch, non-premium users ads play in between every few tracks [22]. In February, Spotify added the “repeat one” feature [23]. Repeat one grants users the option to repeat a single track over and over [24]. These highly requested changes illustrate that Spotify cares about users.

Working with a college students budget, Spotify slashed the premium $9.99 monthly rate to $4.99 in March [25]. They partnered with SheerID to validate eligibility. This price change is valuable because college students represent an important key demographic in streaming use [26]. This differentiates Spotify from other streaming services like Rdio and Beats that charge $10 monthly.

Unique Product Development

Competition among streaming services leads Spotify to completely redesign its user interface layout on all platforms. Spotify rolled out a sleek modernized look on April 2nd. This major design update was the first since its launch in 2008, and to keep current it was a smart move [27].

Spotify’s New Look Video [28] 

The new dramatic, dark color scheme highlights important buttons, includes circular images for people, and features square album shapes [29]. The browse tab is revised and categorized between top lists, releases, news, and moods. “Your Music”, a collection of users saved albums, songs, and artists is a new addition [30]. The Your Music addition mimics iTunes library and it is comparable to Rdio’s “collection” feature. It helps users save, organize, and browse through their favorite music. The new layout feels unified and balanced, and should attract new users [31].

WHATS NEXT FOR SPOTIFY:

Spotify is headed in the right direction, but with downloads declining, new rival services like YouTube, Apple, and Amazon that have huge user bases are joining the streaming market [32].

Being active puts Spotify in the forefront, which looks great for Investors. It is rumored that an IPO is in Spotify’s near future. Though the company has declined all comments, a job advertisement for an “External Reporting Specialist” has been posted on their website and LinkedIn [33]. Their future looks competitive but successful.

Sources: 

1. Spotify’s Logo 2014, Spotifypress.com, RT: 4/04/2014

2. Spotify’s Application on Three Platforms, Spotifyblog.com, RT: 4/01/2014

3. Spotify Press Fast Facts, Press.Spotify.com,  RT: 4/01/2014

4.The Founders of Spotify, Press.Spotify.com, RT: 4/01/2014

5.Spotify’s Chief Sales, Marketing, and International Growth Officer, Press.Spotify.com, RT: 4/01/2014

6. Chief Content Officer & Managing Director USA,Press.Spotify.com, RT: 4/01/2014

7. Head of Content, Press.Spotify.com, RT: 4/01/2014

8. “And The Winner Is… Best Music On-Demand Streaming Service”, Cultofmac.com, 2/18/2014, RT: 4/07/2014

9. “Beats Music Is Here”, Beats Music Blog 1/16/2014, RT: 4/08/2014

10. “Beats Music vs. Spotify: Can Dr. Dre outmix the king of streaming”, Digital Trends, 1/27/2014, RT: 4/07/2014

11. “Last.fm Bands up with Spotify to offer on-demand tracks”, CNET, 1/29/2014, RT: 4/04/2014

12. “Did Someone Say On Demand?”, Last.fm Blog, 1/29/2014, RT: 4/04/2014

13. “SoundHound Launched “Add to Spotify”, Business Wire, 2/21/2014, RT: 4/07/2014

14. “SoundHound Now Lets You Easily Add Your Discovered Music to Your Spotify Playlist”, appdevice.com, 2/24/2014, RT: 4/07/2014

15. “Coachella here we come” Spotify News, 4/7/2014 RT: 4/14/2014

16. “Spotify’s Coachella #WeWereThere Campaign: High Tech and Sweet, Sweet Air Conditioning”, Billboard, 4/11/2014, RT: 4/14/2014

17. “Sprint and Spotify Plan to Partner Up”, recode.net, 4/11/2014, RT: 4/14/2014

18. “Spotify, Sprint Plan Music Bundle To Be Unveiled This Month”, Billboard, 4/12/2014, RT: 4/14/2014

19.“Spotify Acquires the Echo Nest”, Billboard, 3/06/2014, RT: 4/02/2014

20. “Spotify Acquired Music Tech Company The Echo Nest in A $100M Deal” , TechCrunch, 3/07/2014, RT: 4/07/2014

21. “Rhapsody Kills its Echo Nest partnership following Spotify acquisition”, Venturebeat.com, 3/21/2014, RT: 4/09/2014

22. “Spotify’s free shuffle mode arrives on iPhone”, The Verge,1/08/2014, RT: 4/02/2014

23. “Repeat One”, Spotify News Blog, 2/07/2014, RT: 4/08/2014

24. “Spotify users can now repeat the same song over and over and over again”, Hypbot, 2/10/2014, : 4/02/2014

25. “Spotify Offers 50% Student Discount”, Hypbot, 3/25/2014, RT: 4/02/2014

26. “Spotify introduces 50% discount for college students”, Los Angles Times, 3/25/2014, RT: 4/07/2014

27. “The Good, The Bad, The Less Ugly: Taking Spotify’s New Redesign For a Test Drive”, Billboard, 4/03/2014, RT: 4/04/2014

28. Spotify Paints It Black with New Look, YouTube, 4/01/2014, RT: 4/06/2014

29. “Spotify’s biggest redesign ever brings long awaited Collection view”, The Verge, 4/02/2014, RT: 4/07/2014

30. “Spotify paints it black with new look”, Spotify News, 4/02/2014, RT: 4/08/2014

31. “Spotify beautifies”, CNET, 4/02/2014 RT: 4/08/2014

32. “Spotify faces challenge from Internet giants before IPO” New York Post, 3/30/2014, RT: 4/14/2014

33. “Spotify seeks to hire U.S. filings expert as bankers eye IPO” Reuters, 2/17/2014, RT: 4/14/2014