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Spotify Face the Music Update 2016

Solution Id Length Case Author Case Publisher
2481 1392 Words (5 Pages) Isaac Sastre, Govert Vroom IESE : IES631
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The entire case study focuses on the evolution of the music industry and Spotify being the key player in the music industry. With the emergence of new and innovative technology, the recorded and physical music industry has been transformed into the digital music industry. In the early 90s, the music industry was concentrated by big players such as EMI, Sony Music, and Universal Music group. The rise of the internet and the development of new devices has spurred the range of software that has introduced the digital music. As time passed, the era of smartphones and streaming emerged. In the 2000s subscription-based services got attention and Spotify came into the music market. The company grew immensely and offers several features to the customers including the playlist, and social features. In addition to this, competitors of the streaming music industry have been highlighted. The entire industry has been subjected to continuous competition but it solely relies on the strategies of the company. 

Following questions are answered in this case study solution:

  1. How is Spotify a platform? What participants are part of it?  In what way Spotify grows and become successful through its platform and the participants?

  2. How do you view the future of Spotify? Can it become profitable? How could it do to become profitable?

  3. Will music streaming be a winner-take-all industry?

Case Study Questions Answers

1. How is Spotify a platform? What participants are part of it?  In what way Spotify grows and become successful through its platform and the participants?

Spotify, a largest music platform was launched in 2008 in Sweden and Western Europe. Spotify made deals with the major labels of the market, and independent companies were approached that allowed the organization to stream its catalogs.  Initially, unpaid services were offered to the consumers where Individuals can send invites to each other. With the passage of time, six months of free premium was given to its US consumers. This contributed towards the growth of the company. There are two participants of Spotify: Free users and Premium users. The only difference between these two participants is that free users are interrupted by a short video advert while premium users enjoy higher quality audio without any advertisement. A separate mobile app has been developed that is available for Android as well as iOS users. When it comes to advertising and promotion, bundles and discounts are offered to customers. For instance, in 2016 Spotify gave free premium service for one month in different countries. The development of different features over time gave success to Spotify. This includes the functionality and social feature. These features made Spotify a music platform as the app is simple to use. Users can access any song of their choice and can browse the most popular tracks at any time. ‘Discover’ feature was also added to the app that suggests new music artists to the users. The social feature allows the users to follow their friends through this app that gives them access to their playlist. Spotify also integrated with Facebook and Twitter to promote and grow itself. This allowed users to check the listening habits of their friends on social media. This feature also allowed people to share their music on Facebook with their friends even if they are not a part of the Spotify community. The platform grew when the playlist feature was added where users could share their playlists with third party websites such as Playlist.net and Shareplaylist.net. The continuous innovation, changes in design features, and implementation enabled Spotify to react quickly to the external changes in the environment. In addition to this, the employees were given an environment to present their ideas and skills that helped the company to become successful.

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