By Hannah D Friedland
THE SPOTIFY STORY:Spotify is a music streaming service that puts users in control of 20 million licensed songs . 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 . Artists earn royalty when their music is played, and there are over 24 million active users currently in 55 markets .
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.
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 . Beats Music entered the competitive on-demand music market in January , and is Spotify’s biggest challenger.
Beats entry in the market put Spotify in “go-mode”.
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.
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 .
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” . 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.
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 .
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 .
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 .
#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 . 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.
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  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 .
In efforts to boost the “discovery” element, Spotify acquired The Echo Nest in March . The Echo Nest is a music intelligence company that examines listening behavior and makes musical recommendations. Spotify paid $100 Million, with 90% Spotify equity . 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 . 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.
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 . In February, Spotify added the “repeat one” feature . Repeat one grants users the option to repeat a single track over and over . 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 . They partnered with SheerID to validate eligibility. This price change is valuable because college students represent an important key demographic in streaming use . 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 .
Spotify’s New Look Video 
The new dramatic, dark color scheme highlights important buttons, includes circular images for people, and features square album shapes . 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 . 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 .
WHATS NEXT FOR SPOTIFY:
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 . Their future looks competitive but successful.
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