Tag Archives: Daniel Ek

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

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by ERIN SINGLETON

HEADQUARTERS

Spotify AB
Birger Jarlsgatan 61, 10tr
113 56 Stockholm
Sweden
556786-5729
(Research & Development)

Spotify Ltd.
4th Floor
25 Argyll Street
London W1F 7TU
United Kingdom
(Main headquarters)

http://www.spotify.com/

KEY EXECUTIVES [1]

ABOUT 

 Spotify is a digital music streaming service that allows users to create personal playlists and radio stations, browse Spotify-curated playlists, and share music with friends. Users can do this through their mobile devices, tablets, or desktop computers. The service currently has more than 30 million songs registered within its system through licenses with major labels and recording artists [2]. Developed in 2006 by entrepreneurs Daniel Ek and Martin Lorentzon in Stockholm, Sweden, Spotify was created as a response to the illegal downloading of music going on by consumers through piracy sites like Napster [3]. In 2008 the service was launched in Scandinavia, France, the U.K. and Spain; in 2011, it made its way to the U.S [3]. There are currently over 60 million users (15 million of which are paying users,) 1.5 billion playlists, and 20,000 songs added per day [2].

MARKET EXPANSION

Spotify is currently available in 58 markets worldwide, including Brazil, Germany, New Zealand, Nicaragua, Taiwan, Italy, and more [2]. In 2013, Spotify expanded to 8 new locations in its steps towards penetrating Latin America and Asia markets, launching in Mexico, Hong Kong, Malaysia, and Singapore [4]. Spotify introduced Canada’s launch in 2014 [5]. Plans to enter Japan are still in the works, and previous plans to enter Russia have been halted due to its unstable economic conditions [6]. As Spotify has continued to expand its availability across the globe, its number of users has greatly increased every year.

 FINANCIALS

Despite industry rumors, Spotify still remains a privately funded company and is not going public anytime soon[7][8]. Spotify is currently close to completing a new round of funding from Goldman Sachs and an Abu Dhabi sovereign wealth funds, raising $400 million and putting its value at $8.4 billion [9]. After the deal, Spotify will be worth double the value of its closest competitor, Pandora Music ($3.85 billion), despite having higher net losses than Pandora and less market share (6% versus 31%, respectively) [10]. The deal will also put Spotify at the top ranks of the highest valued privately funded technology companies, along with Square, Dropbox, and Airbnb [11].

BUSINESS MODEL

There are two tiers for Spotify users: ‘freemium,’ a free, ad-supported streaming format, and ‘premium,’ an ad-free streaming subscription for $9.99/month. The premium subscription comes with other perks, including unlimited song skips, offline mode ability, and on-demand mobile access [12]. Additionally, there is a student tier for $4.99/month and a family plan for $5.99/month. Spotify philosophizes that the freemium option will drive users to eventually pay for the better experience [2]. Through these payment options, Spotify has paid $2 billion USD to the music industry, $1 billion of which coming from 2014 alone [2]. 70% of revenues earned are paid out to rights holders in the industry, while Spotify holds onto the remaining 30% [2]. Spotify does not pay ‘per stream,’ but rather through royalty statements that are dependent on the country the artist is being streamed, the number of paid users, the country’s currency value, and the artist’s royalty rate. As a result, ‘per stream’ payouts are typically between $0.006 and $0.0084 [2].

ARTIST BACKLASH

do-no-reuse-taylor-swift-the-beat-bb36-sarah-barlow-billboard-650

Taylor Swift pulled her catalogue off Spotify this fall 2014. Image courtesy of Billboard

With the trending drop of physical sales and digital downloads, there has been heavy debate circulating the music industry involving streaming companies’ payouts. More specifically, there has been criticism from recording artists and songwriters who feel that their ‘art’ is being undervalued and deserves fairer compensation from streaming services. Just this past fall, Taylor Swift pulled her entire catalog off of Spotify in defense of songwriters, saying that she is “not willing to contribute [her] life’s work to an experiment that [she doesn’t] feel fairly compensates the writers, producers, artists, and creators of this music” [13]. Other artists who have called out against the streaming service include Jason Aldean, Radiohead’s Thom Yorke, Talking Heads’ David Byrne, and others [14]. In response, Ek argues that record labels are to blame since they are the owners of the music and thus the ones distributing it to their artists under their own respective terms [14].

The biggest artist-led backlash against Spotify is the creation of competitive streaming service Tidal, an artist-owned global music and entertainment platform ran by Jay Z, Beyoncé, Deadmau5, Madonna, and other music superstars [15]. To counter artist tensions, Spotify recently rolled out a new feature called Tweet the Beat, which allows users to express their gratitude towards their favorite artists through an interface pop-up asking them to thank the artist via a pre-written tweet [16]. Rihanna is the only artist users have been asked to thank. This experimental feature has been negatively received by Spotify users, who view it as a spam [15]. A Spotify spokesperson says that, “[They’re] always testing new things on our different platforms and to various user groups,” most likely to stick out amongst the competition [15]. However, Tweet the Beat has been rolled back as a result of such critical opinions.

RECENT NEWS

These past few years have been busy ones for Spotify as the company proactively works towards staying ahead of the concentrated streaming market. In January of 2015, Spotify introduced Touch Preview, a “better way to preview any song, album, artist, or playlist” [17]. This feature allows users to gain a “sneak peak” to a song or playlist by holding down a finger to the screen to preview the song instantaneously. If the user likes what they hear, they can save the song with one simple swipe.

In February of 2015, Spotify introduced an update for desktop users, presenting fully integrated lyrics, powered by Musixmatch, as well as an explore option to search popular lyrics from Spotify’s top songs [18]. The desktop update also included easier access to Friend Feed, which allows users to discover what their friends are currently listening to, as well as a revamping of daily viral charts.

 

In March of 2015, Spotify’s PlayStation Music was launched in partnership with Sony Network Entertainment International LLC, making it “easier than ever for gamers to enjoy their favorite tracks whilst playing their favorite games” [19]. Users are able to create their own on-demand soundtracks to their games without interruption to the gaming experience. Just this April 2015, Spotify launched Spotify for Brands, a platform that reveals audience statistics and insights to benefit brands in their endeavor to connect with the younger generations [20].

OVERVIEW

Since its 2006 development and 2008 initial launch, Spotify has demonstrated significant exponential growth over the past 7 years with no sign of slowing down anytime soon. Leading the pack in the digital streaming market, the service is tirelessly working towards providing unique innovations and opportunities for its consumers that one can only expect to continue in the many years to come.

SOURCES

[1] Spotify Biographies, Spotify Press.

[2] Spotify Artists, Spotify Explained.

[3] Forbes, Spotify’s Daniel Ek: The Most Important Man In Music

[4] Chicago Tribune, Spotify Expanding into Asia, Latin America

[5] Spotify Press, Spotify is Live in Canada!

[6] Business Insider, Spotify has cancelled its launch in Russia

[7] Yahoo! Finance, Spotify seeks to hire U.S. filings expert as bankers eye IPO

[8] Yahoo! Finance, Spotify isn’t going public anytime soon

[9] Yahoo! Finance, Spotify Nears New Funding at Valuation of $8.4 Billion

[10] Market Realist, Why Is Spotify’s Valuation More than Double Pandora’s?

[11] Wall Street Journal, The Billion Dollar Startup Club

[12] Pocket-Lint, Spotify free vs Spotify premium: What’s the difference?

[13] Rolling Stone, Taylor Swift’s Label Head Explains Spotify Removal

[14] Rolling Stone, Spotify Founder Fires Back at Taylor Swift

[15] The Telegraph, Stars lead backlist against Spotify with their own music streaming site Tidal

[16] Digital Trends, Spotify Rolls Back ‘Tweet the Beat’ for Rihanna After Back Lash

[17] Spotify Press, Introducing Touch Preview: a better way to preview any song, album, artist, or playlist

[18] Spotify Press, Introducing our latest update for Spotify on desktop

[19] Spotify Press, Soundtrack your game with Spotify on PlayStation Music

[20] Spotify Press, Spotify launches playlist targeting for brands

Spotify

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by Helen Lu

[1] Spotify’s Logo

KEY EXECUTIVES

[2] Spotify Founders- Martin Lorentzon & Daniel Ek

[3] Jeff Levick- Chief Business Officer

 

[4] Steve Savoca- Head of Content

 

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

SPOTIFY OVERVIEW

[6] Spotify’s sleek interface layout for their multi-platform service.

Spotify is a privately-owned, digital music streaming service that provides on-demand access to tracks. It is available on multiple platforms, including computers, mobile, tablets, and home entertainment systems. Originally founded in Sweden in 2006, Spotify launched in the United States in 2011; it is now available in 58 markets. [7]

Spotify offers listeners the free model, “made possible by ads,”  and the premium model for $9.99 monthly, which is ad-free, high-quality, and available offline. [8] With over 20 million songs, over 20,000 tracks added daily, and over 1.5 billion playlists, Spotify has accumulated 10 million active users and a total of 40 million active users. [9]

COMPETITORS

Rdio, Pandora, Rhapsody, Google Play Music, Beats, iTunes Radio, Music Unlimited, and Xbox Music are worthy contenders in this competitive space. Product reviews assess service quality with major factors include song catalog, user interface, support, and features. [10] Each racing for a market share, these top players in the market are making strategic ploys to stay afloat.

On November 12th, Youtube announced their own streaming service, Youtube Music Key for $9.99. It will be interesting to see how it will affect the music industry when it fully hits the market in 2015. [11]

[12] Spotify and The Echo Nest collaboration

In early March 2014, Spotify acquired The Echo Nest, a big data company to enhance the music discovery feature, forcing Rdio, Rhapsody, iHeartRadio, and Vevo to look elsewhere for a discovery algorithm. [13]

THE SPOTIFY STRATEGY

Spotify has successfully targeted college students, establishing a solid audience base and brand loyalty. With personal information confirming their status, Spotify offers students Spotify Premium for only $4.99. [13] 

[13] Spotify engages their target audience: college students and 18-24 year-olds.

COLLEGE CASE STUDY

Spotify’s tenacious grasp on college students’ listening is reflected in their recently released research report of the Top 40 Musical Schools in America. The findings are a close study of the musical norms in the schools.

[14] Detailed graphs document music-genre distribution and listening spikes, showing not only what students listen to but also how they listen.

The data that Spotify is able to collect can be utilized for targeted advertising and marketing campaigns today. Moreover, with such a large following of the developing youth, Spotify is not only able to make significant advancements with the invaluable information about  today, but accurate inferences about these soon-to-be adults tomorrow. [13]

#THATSONGWHEN

Spotify launched their #thatsongwhen campaign with advertising agencies Ogilvy & Mather and David to further engage their millennial base. #Thatsongwhen allows users to tie their emotional experiences to their favorite songs, to create, and to tell stories. The customization, personalization, and interactivity of a musical experience attracts and retains a young crowd. [15]

The stories are media clips that are charged with emotion, and of course, music. Don’t Go Chasing Girls is about a man’s early memory of his childhood crush that is easily triggered with TLC’s hit song, Don’t Go Chasing Waterfalls. Stories and songs are updated and posted on a live feed.

AD TAKEOVER

Spotify is introducing two new advertising options for eager advertisers:

1. The dubbed Video Takeover, only available on desktops, allows brands to takeover the screen during 15-30 second advertising breaks.

2.The dubbed Sponsor Sessions forces mobile users to view a 15-30 second video on their mobile devices in order to proceed onto 30 minutes of uninterrupted streaming. [16]

McDonald’s, Universal Pictures, and Ford are just some of the major sponsors that have opted into this advertising innovation. [17]

[18] McDonald’s format and utilization of Spotify’s advertising product – Video Takeover.

SPOTIFY PARTNERSHIPS

VODAFONE

Everything is going mobile, and music is no exception. This rapid trend of playing and streaming music from a smartphone is particularly prevalent in Australia. Due to these recent findings, Vodafone Australia has partnered with Spotify to bundle in Spotify Premium for free with their monthly plan. A Spotify Premium subscription generally costs $11.99 Australian dollars each month. The exclusive offers with Spotify vary, and are known as the Red Plans. [19]

[20] Research shows that 1.5 million Australians stream music from their mobile devices.

Vodafone believes that Spotify Premium’s features complement and maximize the use of their faster network speeds, value plans, and expanding 4G network. Both the companies and the listeners are benefitting from this collaboration as the marriage of these digital services follow consumer trends and meets consumer needs. [21]

CARPLAY

Apple Carplay is an a new feature configured in select 2014 vehicles. Spotify is on board for this innovative ride as it has updated and fixed some bugs for this new multimedia system. [22] The music player allows users to access their Spotify accounts using a compatible iPhone.  [23] With a built-in display to play music, Carplay is an exclusive and luxurious market; the Ferrari FF is one of the few select cars with Carplay. Several automobile manufacturers, however, are making an effort to include and support this system in the future.  [24]

[24] Spotify collaborates with Apple Carplay to incorporate music services in the latest car models.

UBER

Uber is a hip taxi service, and Spotify is a hip streaming service. These two successful startups partner up for a new listening experience. Passengers can link their custom playlists to Uber vehicles for a fun ride. Although this new feature has started off in ten cities, it makes a big splash in the car service industry and the music industry. This partnership allows both companies to co-promote their respective brands and to change with the times. The service is for Spotify Premium account holders. [25]

[26] Spotify and Uber modernize the standard cab-ride as they join forces to create a new listening experience.

SPOTIFY CONTROVERSY

Taylor Swift pulled her entire catalogue from Spotify’s music database as she believes that it does not fairly compensate artists. [27] As a popular musician, her bold move and her public statements rejecting the streaming business model has made headlines for weeks. Fans and critics are responding to her decision with distaste as both parties point out that there are other viable services, such as Youtube and SoundCloud, to play her music. [28] While she recently accepted the first-ever Dick Clark Award for Excellence at the 2014 American Music Awards Ceremony, she added another snide comment jabbing at Spotify and streaming services again. [29] Jason Aldean has followed Swift’s footsteps, and pulled his new album Old Boots, New Dirt from Spotify. [30]

Spotify executive, Ek, combats this frenzy and reports that artists that use Spotify to promote their music actually sell more, and that Spotify has returned over $2 billion to music industry today. Top artists like Swift are set to project over $6 million in revenue a year. [31] Despite the financial debate and moral controversy, the Spotify team still hopes for Swift to change her mind. [32]

[33] Taylor Swift is a firm believer in the value of music, and that it should not be free. Swift has pulled her music catalogue from Spotify.

It is unlikely that many artists will join Swift’s banning of the digital streaming business, as it is the digital age.  Reports confirm that streaming services grew 28% in the first half of 2014. [26] Listeners’ habits changed; artists can sink, but digital streaming services will swim.

SPOTIFY: LOOKING AHEAD

 Despite the recent controversies, Spotify has achieved success with their recent collaborations; the student discount and the partnership with Vodafone have led Spotify subscriptions to increase by 42%. [28]  Spotify Family Plan has launched with popular demand and proven financial success with previous discount deals. The plan allows subscribers to add four family members to their account for half the price. [34]

Spotify’s name is globally recognized, and Spotify’s services are well integrated into the new digital age. Its key strategies and partnerships keep it on the bleeding edge of the music industry.

 Sources

1. Spotify’s Logo, Spotifypress.com, RT:11.29.2014

2. Daniel Ek and Martin Lorentzon, RT: 11.29.2014

3. Jeff Levick, RT: 11.29.2014

4. Steve Savoca, Spotifypress.com, RT:11.29.2014  

5. Ken Parks, Evolver.fm, RT: 11.29.2014

6. Spotify Interface Layout,  RT: 11.29.2014

7. Spotify Business Information, investing.businessweek.com, RT: 11.29.2014

8. Spotify Official Website, spotify.com/us, RT: 11.29.2014 

9. Spotify Press Information, spotify.com/information, RT: 11.29.2014 

10. “Spotify and competitors play to their musical strengths”, usatoday.com, RT: 11.29.2014 

11. “YouTube Launching Spotify-Style Paid Music Service”, TIME, RT: 11.29.2014

12. Spotify and The Echo Nest Collaboration, RT: 11.29.2014 

13. “Will Spotify’s hat trick help it pull ahead of competition?”, Fortune, RT: 11.29.2014

14. How Students Listen, spotify.com, RT: 11.29.2014 

15. “Spotify Ties Music to Personal Stories in Its New Ads”, adweek.com, RT: 11.29.2014

16. “Spotify Unveils Video Takeover Ad Product for Free Users”, telecompaper.com, RT: 11.29.2014

17. “Spotify is bringing video ‘takeover ads’ to its free service”, theverge.com, RT: 11.29.2014

18. Spotify Video Takeover Format, spotify.com, RT: 11.29.2014  

19. “Vodafone offers postpaid customers free Spotify Premium access”, CNET, RT: 11.29.2014

20. “Spotify partners with Vodafone Australia for down under listeners”, rainnews.com, RT: 11.29.2014

21. “Vodafone Australia and Spotify join forces!”, vodafone.com, RT: 11.29.2014

22. “Spotify adds support for Apple’s CarPlay in update to iOS app”, talkingnewmedia.com, RT: 11.29.2014 

23. “Spotify Adds CarPlay Support in Latest iOS Update”, macrumors.com, RT: 11.29.2014

24. “Apple CarPlay comes to Pioneer stereos as Spotify adds support”, engadget.com, RT: 11.29.2014

25. “Tuneup, redefined: You can now Spotify your Uber ride”, CNET, RT: 11.29.2014 

26. Uber and Spotify Partnership, Uber.com, RT: 11.29.2014

27. “Taylor Swift is right about music, wrong about Spotify, says CEO Ek”, CNET, RT: 11.29.2014

28. “Why Taylor Swift Will Lose Her Battle With Spotify”, TIME, RT: 11.29.2014

29. “AMAs: Taylor Swift Continues Anti-Streaming-Service Stance in Dick Clark Award Speech”, hollywoodreporter.com, RT: 11.29.2014 

30. “Jason Aldean Agrees with Taylor Swift, WIll Remove New Album From Spotify”, musictimes.com, RT: 11.29.2014 

31. “$2 Billion and Counting”, spotify.com, RT: 11.29.2014

32. “Here’s Why Taylor Swift Pulled Her Music From Spotify”, TIME, RT: 11.29.2014

33. “Taylor Swift and the Whole Spotify Thing”, uloop.com, RT: 11.29.2014

34. “Spotify launching family plan with cheaper subscriptions for families”, theguardian.com, RT: 11.29.2014

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