Ken Parks- Chief Content Officer & Managing Director USA
 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. 
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.  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. 
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. 
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. 
 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.
 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. 
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. 
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.
 McDonald’s format and utilization of Spotify’s advertising product – Video Takeover.
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. 
 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. 
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.  The music player allows users to access their Spotify accounts using a compatible iPhone.  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. 
 Spotify collaborates with Apple Carplay to incorporate music services in the latest car models.
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. 
 Spotify and Uber modernize the standard cab-ride as they join forces to create a new listening experience.
Taylor Swift pulled her entire catalogue from Spotify’s music database as she believes that it does not fairly compensate artists.  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.  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.  Jason Aldean has followed Swift’s footsteps, and pulled his new album Old Boots, New Dirt from Spotify. 
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.  Despite the financial debate and moral controversy, the Spotify team still hopes for Swift to change her mind. 
 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.  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%.  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. 
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.
Spotify is one of the top streaming services on the market and is all about finding the right song for the right moment. There are over 30 million songs to choose to stream from, with over 50 million active users in 58 markets across the globe . While Spotify is relatively new in American, launching in 2011, it was founded in 2008 in Sweden.
Users can create profiles, and on there create playlists, they can follow other users playlists, and share songs on social media by connecting through Tumblr, Facebook, and Twitter. In addition to following their friend’s accounts they can also follow celebrity accounts and see what their followers are listening to on a side bar. The service also serves as a great music discovery tool, with Spotify’s own curated playlists, and radio feature similar to that of Pandora. With free and paid accounts there is a little bit of something for everyone with platforms on a user’s computer, mobile, tablet, and most recently home entertainment systems.
Subscriptions are broken up into two types, free and “premium” accounts in which users pay $9.99 a month to experience add free listening as well as more access to mobile listening and off line listening with data. The ratio to active paying subscribers to free listeners is over 20% .
Infographic aligning Spotify with their top competitor streaming services .
With the legacy of CDs and era of illegal downloading slowly dying out in the music business, people are looking more and more to streaming as a way to consume music. Because of this and the gap in the market for streaming services, in the last two years there has been a large emergence of streaming services that serve as competitors to Spotify. Last year Beats headphones launched Beats Music, and Amazon Prime Music launched recently as well, amongst already existent competitors like Rhapsody and Google Play.
On September 14, 2014 Deezer came to America, which could potentially prove it self to be Spotify’s biggest competitor. Deezer is one of the world’s biggest names in streaming with its services available in 180 countries . Due to licensing rights, they were not able to expand into the U.S. for quite some time, but now have the market of paying subscribers to go from 5 million users to rival Spotify’s 10 million international users . However Spotify is at a slight advantage, because while Deezer is usually formatted with a similar interface to Spotify, Deezer in America is launching on a new platform. Deezer is only launching for US users through pricy Sonos sound systems and only those with speakers and the app can subscribe to the Deezer Elite service, with a steep price tag of $19.99 a month which is double that rate to Spotify’s for premium .
In addition to Deezer coming to America this fall, Spotify also recently suffered another large loss. Pop- country princess, Taylor Swift, just pulled her entire catalog from the streaming service. With such a large artist, obviously Swift has caused a large impact on what consumers are streaming, especially with the recent release of an album. This is all apart of a larger argument right now not only with Spotify, but all streaming services that artists are being paid too little for the amount of plays they are receiving . However, Taylor’s case is different. Management released a statement that she believes art and music are important and should be fully purchased and that albums and means of listening to that music should not be free . Because of this all of her music was pulled from streaming services with free accounts, but not those services where you are required to pay in order to have a profile. There is large debate as to whether or not her music will return, but for the time being fans are expected to buy albums, and how the relationship between Taylor Swift and Spotify will develop is one to track.
While this fall has given Spotify some tough situations, this has not stopped them from expanding.
Spotify Family, is the newest development in the programs interface. Similar to Netflix family accounts, Spotify Family now allows large families to have one billing account but different profiles for different family members, so Dad’s Rolling Stones playlists don’t get mixed in with Daughter’s Disney Princess playlist . There are separate profiles and therefore different recommendations and profiles can be listened to at the same time, unlike before when one account could only be streamed in one place at a time . In addition there is also a premium upgrade discount for families wanting to upgrade to this added service .
SPOTIFY + UBER
Spotify collaborates with popular car service, Uber .
Spotify is know for its unique brand collaborations, which continue as they offer music lovers cool experiences. This November on the 21st they collaborated with Uber to give Spotify and Uber the ride of a lifetime . When users had both apps on the 21st, they could not only request a special car and get a vehicle with the new Spotify- enabled Uber cars, but they also had the chance to either get in a car that took them to a secret show in an undisclosed location, or get the chance to be picked up and driven around by some of their favorite artists . This venture really shows the creative side of Spotify and how they connect with their users beyond a screen.
Artists and Shows available during the Uber promotion .
SPOTIFY + CARPLAY
Besides the Spotify- enabled Uber cars, Spotify is now reaching our vehicles this fall with CarPlay support in the latest iOS update . The ioS app adds Apple CarPlay integration with that allows users to access the app through dash receivers and makes it easier for people to use the service in their vehicles . Audi, Ferrari, Ford, and Hundai all plan on making the application available in their upcoming models for the next year .
With all of these great strides Spotify is taking to make them selves more user friendly and connect with their users, they will continue to be one of the top streaming services into 2015.
We can look to see Spotify as a brand present at future music festivals next spring as the festival season is fast approaching, as well as other unique music experiences brought to users with live music interaction, beyond the screen.
In January 2000, Tim Westergren founded a company called Savage Beast Technologies, based on his idea to develop a music genome. This technology was used to develop playlists based on individual consumer preferences. Westergren originally marketed these music recommendation service businesses without much success. In 2004, he shifted his target audiences from businesses to individual users and changed the name to Pandora. Listenership increased sharply. A 2007 ruling on increased royalty prices threatened to ruin Pandora, but the issue was resolved in 2009. The introduction of the iPhone app that allowed people to stream music was a game changer. 
Pandora earns the majority of its revenue (87%, 87%, and 88% in the last three years) through computer and mobile based advertising sales. The company offers a free subscription plan which generates revenue through these advertisements, as well as Pandora One, which offers a commercial free option to subscribers for a fee. The ability to reach audiences through mobile and other “on-the-go” devices has increased profits significantly. Total revenue has grown from $137.8 million in 2011 to $427.1 million in 2013. Pandora Media Inc.’s common stock on the NASDAQ market, NYSE, is currently valued at $28.45, a 1.01% decrease from its previous close, as it continues to fluctuate. Based on the latest report, Pandora has over 70% share of internet radio within the top 20 stations in the United States. 
By allowing its subscribers to dictate the type of songs and comedy they want to hear, Pandora has become internet radio’s market leader in the United States. Listener playlists are developed based on their feedback from a library of songs that have been categorized based on hundreds of musical qualities. Since its inception, Pandora has grown to have 200,000,000 registered users, over 1,000,000 songs in its collection, over 4 billion stations created, and has expanded internationally to Australia and New Zealand. Listeners can mix up to 100 stations, customizing them to their liking. They can also create profiles and connect with others based on mutual preferences. In addition to computers, Pandora has expanded to mobile “apps” on smartphones such as Blackberry, Android, the iPhone, and other interactive devices including the Android tablets, iPad, and Amazon Kindle Fire, and the Nook. Pandora made deals with car companies, including BMW and Buick, and can now be accessed in vehicles. 
Pandora Media vs. Other Internet Audio Providers 
The Music Genome Project sets Pandora apart from competition. 
The Music Genome Project®
Pandora’s executive team recognizes the need to accommodate the individual musical tastes of subscribers. The Music Genome Project® is the most intricate system ever created to choose music based on its characteristics. Trained musicologists thoroughly analyze songs based on attributes such as voice, tone, genre, and rhythm. The library includes everything from the week’s Top 40 to classic hits from past decades. The project is often compared to human DNA because every detail is diverse. Musicologists utilize the data stored in the Music Genome Project® to create a satisfying, unique listening experience for all. 
“Pandora Presents” is Pandora’s series of live concerts that allow listeners to connect with their favorite artists. Originating in 2012, these performances continue to be a successful display of user appreciation and set Pandora apart from competition. Pandora employees personalize it further by using listenership they have identified for specific artists to invite certain users to attend the show. 
During a recent October concert in Los Angeles, recording artist, Bridgit Mendler, mentioned Pandora’s role in helping to develop her fan base. Celine Dion performed in New York City on October 29, 2013, promoting her new album “Loved Me Back to Life.” Past entertainers include Dr. Dog, Walk the Moon, Theophilus London, and other emerging artists.
With Apple Inc.’s recent release of its new service, iTunes radio, Pandora’s competition continues to grow. Like Pandora, it creates playlists based on the music the listeners’ choose. It also features the same service options, one with advertisements and commercial free iTunes Match. iTunes Radio allows users to view their entire history and categorize songs by “Hits,” “Variety,” and “Discovery.”  Both services allow users to post to Twitter or Facebook, but while Pandora posts both song and station, iTunes only provides the latter. Apple hopes their loyal 575 million iTunes users will convert to iTunes Radio.
Despite the fact that this new application is just as technologically advanced, Mike Herring, Pandora’s Chief Financial Officer, stated that listening hours grew 9% since last month. Pandora’s market share rose to 8.06% in October 2013 from 7.77% in September, when iTunes Radio was first released. 
Pandora Removes 40-Hour-Per-Month Limit:Pandora has removed its 40-hour-per-month limit on free mobile listening, allowing people unlimited time to use the service. Pandora was able to make this change due to its success in mobile revenue advertising, trailing only Google and Facebook. The limit was placed in March 2013 to control royalty costs, but management eliminated it to stay on top of their competition. 
iPad Redesign:On September 18, 2013, Pandora released the Pandora 5.0 for the iPad. This was the greatest redesign of the app since its launch in April 2010. The iPad’s large screen and touch capability allows users to easily navigate and search their favorite music. This update was made for Android tablets as well. Pandora 5.0 features more intricate music discovery and exploration, a personal music profile and newsfeed, and the ability to connect and share music with friends. 
Pandora on Google Chromecast:Pandora is also now available on Google Chromecast, a TV-connected device that delivers audio and video signals wirelessly to any screen in your home. Chromecast consumers can now use Pandora with the click of their smartphone or tablet. Once the music is sent to the television, the device is no longer needed for the music to continue. The Play, Pause, Thumb, and Skip buttons are still managed through the mobile device used. Listeners can customize the music they choose with Google Play or the App Store.