Spotify by Daniel Rakow

Posted on February 18, 2016 by smwarren

Executives

History

Spotify was developed in 2006 in Stockholm, Sweden. It was founded by the former CTO of Stardoll, Daniel Elk and the co-founder of TradeDoubler, Martin Lorentzon. They officially launched the music streaming service in October of 2008 for paid subscribers and in 2009 they made their service available for free subscriptions. The free subscriptions opened up the service to a bigger audience while slightly hindering their income. In 2011 Spotify crossed over into the United States market and also introduced the Spotify App for devices. (1)

More About Spotify

Since 2011, Spotify has solidified its spot as one of the top music streaming services along with Apple Music and Tidal. Today, Spotify features curated playlists that are made by their employees for paid subscribers. They have radio stations that allow the user to discover new music based on artists that are similar to the ones the user listens to. Along with that, they have a huge library of music consisting of 30 million songs. Their premium service allows users to access all of their songs and provides weekly curated playlists called Discover Weekly. Currently, they have over 75 million users with 30 million of those users being paid subscribers. (2)

Potential Change of Location

(Swedish Flag)

As of recent, Spotify has been hinting at a change of location for its headquarters. Since they started the company, they have been based in Stockholm, Sweden. However, recent circumstances have lead them to reconsider their choice to remain in their hometown. As Elk wrote in an open letter that he posted online, “We love Sweden and believe that this is basically the best environment for us. But at the same time we cannot magically remove the political obstacles. Thousands of Spotify jobs could go to the U.S instead of Sweden.” Spotify is frustrated with the Swedish governments inability to let businesses in their country grow. To start, Spotify believes the housing situation needs to be revisited. It’s extremely difficult to rent apartments in Stockholm because such a large amount are controlled by housing associations. It could take over 10 years to get a rental apartment which makes it extremely difficult for Spotify to bring in foreign talent. Another area Spotify argues needs change is their education system. They argue that the country doesn’t focus at their schools enough on technology. This leads to a lack of programmers for them to hire. The lack of knowledge causes them to have to train more workers, which could be avoided. Lastly, Spotify hopes to change Sweden’s stock options. The country’s rules don’t allow Spotify to grant their employees stock options which would attract brighter employees. (6) (7)

Competition

In the last month Spotify has had to deal with more competition than ever. Not only have they been going head to head with Apple’s streaming service Apple Music, they have also seen a few new players enter the streaming world. To start, Apple has signed exclusive contracts with big artists. These artists’ new albums debut on Apple Music and take a few weeks before they are available on Spotify. Artists like Drake have Spotify users growing impatient when he drops new content. He has 24 million monthly listeners and is the 7th most played artist on Spotify. This could hurt them eventually if it doesn’t change. Jay-Z music streaming service Tidal is another competitor with Spotify. In early February Rihanna took to Tidal to release her new album Anti. While it is now available on Spotify, for months it had users converting to Jay-z’s service to access it. Similarly, Kanye West exclusively released his new album The Life of Pablo on Tidal. However, The Life Of Pablo was recently made available on Spotify as well. Soundcloud, in the last month, has also entered the subscription space. They created Soundcloud Go which will also directly compete with Spotify. Even with all these competing services, Spotify has a loyal user base of over 75 million people that will be hard to take away from them. (8)

Spotify x Billboard

(Billboard)

On April 21 Billboard announced it’s partnership with Spotify for 2016. This is a huge win for Spotify over Apple Music. Billboard will bring all of its users to Spotify instead of Apple Music. Billboard’s charts are turning to Spotify to make it easier for its users to access today’s hits by streaming songs directly from their weekly charts. Now, when viewing the Hot 100 or Billboard 200 the user is able to listen to the songs they are analyzing. There are 30 second previews directly next to the song on the chart that also give the option to stream the full version on Spotify. Billboard will also be publishing 3 new spotify driven charts on billboard.com. One will be a 30 song Velocity Chart which will include the 30 most trending songs on Spotify. The next will have a Viral 50 chart which will consist of the 50 most shared songs across social media platforms like Twitter, Instagram, and Facebook. Lastly there will be a Velocity Chart with 30 songs with 5 songs for each decade (1960-2000). To take a look at the Billboard Hot 100 with Spotify streaming click here. (9)

Money

Spotify recently has raised over 1 billion dollars in debt financing. This is a substantial amount especially for a company that is financially stable. It is no doubt that Spotify now has money to spend but the question is: what will Spotify decide to do with all this extra money? forbes.com went into detail with ways that Spotify is planning on improving. Firstly, they are expected to get into the video space. Apple and Tidal already both have video content on their service. Spotify, being their number one competitor, will definitely start exploring music videos, behind the scenes, artist episodes, tour videos, and live footage. One major area they will have to work on is their payment rates. Their current rate per stream is .004. This rate tends to anger artists because they believe they are not being compensated for their art. This has lead artists like Taylor Swift and Adele to not allow their catalog of music to be included on their streaming service. With the extra money Spotify is planning to start working in these areas. (10)

Sources

(1) Streatfield, Brooke. Rise of a Tech Giant: The History of Spotify. The Telegraph. Retrieved: April 25, 2016

(2) Person, Adam Pasick. The Magic That Makes Spotify’s Discover Weekly Playlists so Damn Good. Quartz. Retrieved: April 25, 2016

(3) Bertoni, Steven. Spotify’s Daniel Elk: The Most Important Man In Music. Forbes. Retrieved: April 24, 2016

(4) Sloan, Paul. The Future of Music. CNET. Retrieved: April 24, 2016

(5) Spotify. Vulcan Post. Retrieved: April 25, 2015

(6) McIntrye, Hugh. Spotify May Soon Leave Sweden. Forbes. Retrieved: April 23, 2016

(7) Swedish Flag. Eduniversal. Retrieved: April 23, 2016

(8) Apple Music’s Biggest Swipe at Spotify Yet. Music Business Worldwide. Retrieved: April 24, 2016

(9) Billboard Staff. Billboard Announces Spotify as Exclusive Playback Partner of The Charts. Billboard. Retrieved: April 24, 2015

(10) McIntrye, Hugh. What Can Spotify Do With The $1 Billion It Just Raised? Forbes. Retrieved: April 24, 2015

Singleton, Micah. Spotify Hits 30 million Subscribers. The Verge. Retrieved: April 25, 2016

Pandora Radio

Posted on February 18, 2016 by Rachel Blackman

By Rachel Blackman

Company

Pandora Radio is an online and mobile personalized radio model that utilizes the Music Genome Project.

Pandora Logo [6]

The Music Genome Project is an algorithm set by music analysts that matches people to other music they may like based on their taste in artist or song [1]. Essentially, the listener may pick an artist/band, genre, or song and, based on the characteristics and technical elements of their choice, music that has similar traits will be played in accordance in a channel format. Comedy has also recently been added to the Pandora portfolio, so there is the option to explore that realm in the same streaming/radio hybrid system.

Pandora also has a blog section and benefits such as exclusive presale opportunities for concerts as well as premade stations for those who just want to listen to a less narrow selection.

There is a freemium version of the service with advertisements between songs, and a premium subscription service, Pandora One, that costs $4.99 a month for no ads.

Brief History

Pandora Radio is, in many ways, looked at as the originator of the personalized streaming service craze that is so prominent in the world today. Founded in 2000 by Tim Westergren and Jon Kraft, the company began humbly as just the idea of the Music Genome Project.

Come 2005 and beyond, Pandora was fully formed and blew up with popularity[2]. People were discovering music and finding the ease of having it on demand and tailored to their own tastes, a model that every competitor has been utilizing since.

Pandora x Ticketfly Merger [13]

As Spotify exploded and streaming services grew, the attention faded a bit from Pandora, but it is on its way back. At the end of last year, Pandora purchased the concert ticketing entity Ticketfly for $450 million in one of its biggest moves ever[3]. With this merger, Pandora is going to be able to sell tickets through its service, adding to its attraction and uniqueness.

Rdio Logo [14]

Next, Pandora purchased the streaming service Rdio’s assets for $75 million in efforts to make it into the digital streaming world as direct competition to players like Spotify and Apple Music[4].

The company is currently in a transition period where it is implementing these new acquisitions in order to get ahead of the game in streaming in 2016 and beyond.

New Features

Browse Graphic [5]

January 28, 2016, Pandora launched a new feature for their app: Browse. Browse recommends and assists people in discovering artists they may like based on their music taste. There is also an analysis level to the feature where listeners can view how many others are enjoying an artist they love, a useful resource for both the creators and the fans. Along with Browse, the app was redesigned to look cleaner and be easier to use[5].

Another exciting and innovative new idea Pandora implemented March 8^th is their AMPcast service. AMPcast allows artists to speak to their followers through audio messages they can record on their cell phones and upload to their music channel[6], a valuable form of connection for the artists to their fan base that has not yet been utilized anywhere else.

Live Music

Pandora Discovery Den [15]

Pandora has been making huge strides in the live music game this year as well. For example, this was their first year as the official streaming partner to the popular and forward-thinking music festival/conference, South By Southwest in Austin, TX. This year, their fittingly named stage Discovery Den hosted hot up-and-coming acts from March 16-19. From hip-hop artists like Kevin Gates and Anderson .Paak to electronic like Louis the Child[7], Pandora was thoughtful and current in its choices and tapped into young, hip audiences in the perfect setting to do so.

Concert poster for The ATL [8]

April 6^th, Pandora announced the lineup for its leap into the hip-hop world via their Pandora Presents: The ATL concert taking place May 5^th. Featuring wildly popular rap and hip-hop acts Young Thug, K Camp, and Dej Loaf, Pandora is targeting a key young and musically active audience that they have not been as present with until now[8]

Company structure

The company has been going through some executive changes in 2016, including naming cofounder Tim Westergren as CEO March 28^{th [9]}. Westergren is a musician himself and has always seen the importance in discovering new talent, something Pandora is putting a lot of attention into currently and a concept that will keep them relevant.

Along with this change, there was a restructuring of the upper offices including instating Mike Herring as President and CFO, promoting Sara Clemens from CSO to COO, and putting Chris Phillips in the Chief Product Officer seat [9].

Revenues

Pandora’s 2016 first quarter financial review has not yet been released, but will be made public April 28. Given the numbers from last year, it would appear as though the company is on an upward trend. Their fourth quarter revenue at the end of 2015 was up 25% year-over-year at $336.2 million, and their total revenues for all of 2015 were $1.164 billion, a growth of 26% year-over-year[10]. It is reasonable to expect that this years numbers will be even greater, especially given their acquisitions of Ticketfly and Rdio and their movement into live music.

As for right now, Pandora Media’s stock has gone up 0.04 since its last close with a volume of 9.06m[11].

Finally, Pandora just hit the $2 billion mark on April 18^thfor artist and songwriter royalties[12].

Overview/Looking to the Future

Pandora is making big moves towards being a powerful player through their innovative new streaming updates, their live music target on hip-hop in particular, and their company restructuring. It should be fascinating to watch how effective their strategies prove to be in execution.

Sources

[1] “About The Music Genome Project®.” (n.d.): n. pag. Retrieved 25 Apr. 2016.

[2] “Origin Story: The Founding of Pandora Radio.” Startup Grind. N.p., n.d. Retrieved 25 Apr. 2016.

[3] Sisario, Ben. “Pandora Buys Ticketfly, a Competitor to Ticketmaster.” The New York Times. The New York Times, 2015. Retrieved 25 Apr. 2016.

[4] “Pandora’s Rdio Acquisition Sets Stage for Epic Streaming Music Battle.” Variety. N.p., 2015. Retrieved 25 Apr. 2016.

[5] “Pandora Debuts New Personalized Destination to Discover Music.” Press Release Distribution, EDGAR Filing, XBRL, Regulatory Filings. N.p., n.d. Retrieved 25 Apr. 2016.

[6] Lunden, Ingrid. “Pandora Raises Its Social Media Game with AMPcast, DIY Audio Messaging For artists.” TechCrunch. N.p., 2016. Retrieved 25 Apr. 2016.

[7] “Pandora Reveals Initial Lineup in Its First Year as the Official SXSW Streaming Partner – NASDAQ.com.” NASDAQ.com. N.p., n.d. Retrieved 25 Apr. 2016.

[8] “Young Thug, K Camp & DeJ Loaf To Perform At Pandora ATL Concert.” Vibe. N.p., 2016. Retrieved 25 Apr. 2016.

[9] “Pandora Brings Back Founder Tim Westergren As Newest CEO.” Forbes. Forbes Magazine, n.d. Retrieved 25 Apr. 2016.

[10] “Pandora Reports Q4 and Full Year 2015 Financial Results.” Press Release Distribution, EDGAR Filing, XBRL, Regulatory Filings. N.p., n.d. Retrieved 25 Apr. 2016.

[11] “Pandora Media Inc.” P Stock Quote. N.p., n.d. Retrieved 25 Apr. 2016.

[12] “Pandora Hits $2 Billion in All-Time Royalties for Artists and Songwriters.” Press Release Distribution, EDGAR Filing, XBRL, Regulatory Filings. N.p., n.d. Retrieved 25 Apr. 2016.

[13] Dufree, Rachel. “Pandora and Ticketfly Join Forces to Create the World’s Most Powerful Music Platform.” Ticketfly. N.p., n.d. Web. 25 Apr. 2016.

[14] “Rdio Adds Free Streaming With Nearly 500 Live Broadcast Stations – Next Geekers.” Next Geekers. N.p., 2015. Web. 25 Apr. 2016.

[15] “Discovery Den at SXSW 2016: Four Days of Your New Favorite Music.” South by Southwest 2016 Music, Film and Interactive Festivals. N.p., 2016. Web. 25 Apr. 2016.

Spotify

Posted on March 25, 2015 by Erin Singleton

by ERIN SINGLETON

Spotify Logo

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]

: Daniel Ek: CEO & Co-Founder

: Martin Lorentzon: Director of the Board & Co-Founder

: Ken Parks: Chief Content Officer & Managing Director USA

: Jeff Levick: Chief Business Officer

: Gustav Söderström: Chief Product Officer

: Angela Watts: VP, Global Communications

: Steve Savoca-Head of Content

: Oskar Stål: Chief Technology Officer

: Peter Sterky: Chief Financial Officer

ABOUT

Spotify Interfaces

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 markets worldwide

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

A comparison of market shares in the Internet radio space

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

Royalty Pay Out

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].

Tidal Logo

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.

JAPAN-ENTERTAINMENT-US-IT-INTERNET-GAMES-SONY

Spotify and Sony form partnership

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

Rdio

Posted on December 1, 2014 by mrondra

Rdio logo. Photo courtesy of Rdio.

Contact Information [1]
Phone: (415) 763-7211
62 First Street, Suit 500
San Francisco, CA 94105
www.rdio.com

History

Rdio is an online music streaming service based in San Francisco [2]. It was founded in 2010 by Skype co-creator Janus Friis and began entirely as a subscription based music service [2]. While Rdio has been lauded for its design within the technology community, the company has experienced a slower take off the ground [2]. Rdio attempted to become a more holistic entertainment service through its launch of Vdio, a video service, in April of 2013 [2]. However the project was unsuccessful and discontinued just eight months later. Following a series of layoffs, Rdio announced on December 3rd of 2013 that Anthony Bay would be appointed as CEO [3]. Bay was previously global head of video at Amazon [3].

Key Executives [1]

Janus Friis, founder of Rdio. Photo courtesy of Forbes.com

Anthony Bay, Chief Executive Officer of Rdio. Photo courtesy of Patrick T. Fallon.

Carter Adamson, Chief Operating Officer. Photo courtesy of Lien Multimedia

Drew Larner, Vice Chairman and Strategic Advisor. Photo courtesy of fastcocreate.com

Scott Bagby, President of International. Photo courtesy of The Music Void.

Financials

On February 3rd of 2011 Rdio released it had raised $17.5 million worth of funds with a list of investors including Friis, Mangrove Capital Partners, and Skype [4]. Rdio’s biggest deal to date struck on September 16, 2013 when it announced a partnership with Cumulus Media, the second largest radio operator in the US [5]. In exchange for granting Cumulus an estimated 15% equity stake in Pulser Media, Rdio’s parent company, Cumulus will provide Rdio with programming and promotional services valued at $75 million over five years [6]. Although this deal was a trade and brought in no cash for either Rdio or Cumulus, it allowed Rdio the capability to offer a “fermium” subscription model [7]. Cumulus’ sale agents will sell commercial spots and share the ad revenue [7]. Rdio has yet to reveal its subscription numbers, however Spotifiy, its greatest rival, currently has 24 million users with 6 million paying [6].

Current News

Subscription Switch-Ups
Rdio proved it could adapt to the music streaming landscape after announcing it would offer a free subscription model for users through ad-supported stations this year [7]. It is essentially an Internet radio experience although Rdio still offers its paid subscription options, Web and Unlimited. This coincides with the hope that a freemium model will serve as a gateway for users to sign up for a paying subscription. Web allows full access to computers for $4.99 per month while Unlimited extends to all devices for $9.99 per month [8]. While Rdio has offered family plans since 2011, earlier this month the streaming service prices were lowered to $5 for each additional family member included on the plan (which levels its family plan price with Spotify) [8]. A family of two costs $14.99 per month with $5 for each additional person however if a family is bigger than five, users must pay the full monthly price of $9.99 for any additional members [8].

Taylor Swift Streaming Debacle

Taylor Swift’s music remains on Rdio despite her Spotify withdrawal. Photo courtesy of Rdio.

Taylor Swift made headlines last month when she pulled all her music from Spotify as she feels they do not fairly compensate music creators and is uncomfortable with the business model [9]. This has brought about questions for the future of music streaming with regard to whether other big name artists will follow suit in pulling their music. Bay has been speaking out in support of Swift and all artist’s choice in how their music is distributed [10]. Due to Swift’s fall out with Spotify, Rdio has been drawing attention to the fact that users still have access to her full catalog of music (with the exception of her most recent album, 1989) through both Rdio’s ad-supported Internet radio and paid subscriptions [10]. Additionally, Rdio currently has 30 million tracks in its library–10 million more than Spotify [11].

Toronto Film Festival Partnership [12]

Ellie Goulding during a Rdio sponsored performance. Photo courtesy of ET Canada.

This past September Rdio was the official music partner for the Toronto International Film Festival. Rdio had a “music hub” at the event with giveaways, listening stations, as well as live music. In fact, Rdio sponsored a free Ellie Goulding concert at Massey Hall. Attendees just needed to visit the “Rdio House” to receive tickets where they could browse through Rdio products and plug into listening stations to listen and browse through Rdio’s library of music. Bay explained the partnership with Toronto was a marketing opportunity to strengthen their presence in Canada.

Roku Launches Rdio App [13]
In August of 2014 Rdio announced plans to launch a new app on Roku. Rdio has been investing heavily in promotion, such as having a Rdio app featured on Roku’s television remote controls. With this, Rdio joins the ranks of just three other services (Netflix, Amazon, Vudu) who have been allotted a remote control button. As a result of this deal, Rdio can now be accessed through three avenues of television: Roku, Chromecast, and Apple TV.

Future Plans

Audio Upgrade [14]
On October 16th Rdio announced its plans to upgrade their entire music catalog to AAC audio files, which is a higher sound quality than MP3. This ushers in a new period for Rdio where users can choose which sound quality they prefer listening to on all devices. Paying users even have the ability to decide which sound quality they want for downloaded songs during offline listening. Rdio also expects that changing from MP3 streaming to 64 AAC streaming could reduce data consumption by a third. This is also welcome news for musicians such as Grateful Dead band member Bob Weir, who worries that poor audio quality during streaming impedes upon the listening experience . Therefore Weir has granted Rdio an exclusive selection of tracks from TRI Studios to support the company’s move in raising the bar of audio quality.

Global Expansion

Rdio acquisition of 9 new territories brings its reach to 60 countries

Rdio acquisition of 9 new territories brings its total reach to 60 countries. Photo courtesy of Rdio.

Rdio announced in May of 2014 that it would be available in nine additional countries throughout Europe and Asia, bringing its total reach to 60 countries [15]. There are five Mediterranean and Eastern European countries that Rdio will now be able to reach totaling 25 million people in Greece, Cyprus, Croatia, Slovakia, and Slovenia [15]. Asia has remained a relatively untapped market for Rdio although its services have been available in Malaysia and Hong Kong for just over a year [15]. 400 million people reside in the Asian countries Rdio is currently working toward expanding–Indonesia, the Philippines, Thailand, and Singapore [15]. While all five of the European territories have been classified as “high income”, Singapore remains the only Asian country that is also categorized within this higher income bracket. In an effort to further push its international reach, this March Rdio acquired Indian streaming service Dhingana with plans to relaunch it later this year [15]. At the time of the purchase, Dhingana had 9 million monthly active users [16]. It was also projected that India will become the largest purchaser of smartphones after China in 2014, an estimated 92% of which will be new users [16]. These are promising statistics considering over 75% of Dhingana users access the streaming service through their mobile devices [15].

Sources

[1] Company Overview of Rdio, Inc. investing.businessweek.com Retrieved: 28 Nov 2014

[2] CEO: Rdio’s problem? Not enough people use Rdio cnet.com Retrieved: 24 Nov 2014

[3] Rdio Names Former Amazon Exec Anthony Bay Its New CEO techcrunch.com Retrieved: 24 Nov 2014

[4] Rdio secures USD 17.5 mln in financing round telecompaper.com Retrieved: 13 Nov 2014

[5] Internet Radio Business with Free Listening Update billboard.com Retrieved: 24 Nov 2014

[6] Music Service Rdio in Deal With Cumulus nytimes.com Retrieved: 13 Nov 2014

[7] Rdio to Expand Its Offerings as Cumulus Partnership Heats Up This Summer billboard.com Retrieved: 13 Nov 2014

[8] Rdio Follows Spotify, Drops Family Plan Pricing pcmag.com Retrieved: 28 Nov 2014

[9] Here’s Why Taylor Swift Pulled Her Music From Spotify time.com Retrieved: 9 Nov 2014

[10] Rdio on Taylor Swift’s Spotify block: “This is art. It’s the artist’s choice” theguardian.com Retrieved: 13 Nov 2014

[11] Spotify and Rdio square off calgaryherald.com Retrieved: 30 Nov 2014

[12] Rdio Partner With Toronto Film Festival billboard.com Retrieved: 28 Oct 2014

[13] Rdio is getting ready to launch a completely revamped Roku app gigaom.com Retrieved: 24 Nov 2014

[14] Rdio upgrades the audio quality of its entire music library venturebeat.com Retreived: 28 Nov 2014

[15] Rdio Now Playing In Nine More European & Asian Countries billboard.com Retrieved: 15 Oct 2014

[16] Smartphone explosion in 2014 will see ownership in India pass US theguardian.com Retrieved: 15 Oct 2014

Spotify

Posted on October 14, 2014 by hlu04

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