ABOUT Spotify
Company structure
Spotify is a Swedish music streaming service company. It was launched in 2008. Spotify currently has around 50 millions registered users worldwide. For attracting potential new paid subscribers, the company provides a free trial. There are 3 different accounts available: free, unlimited and premium. The streaming service is currently available in 58 countries. It is currently one of the top 5 in the global music streaming service market, in terms of number of paid subscribers, global footprint and popularity.
Customer value
- Listen free - users are able to play any song at any time and anywhere
- Browse amazing playlists for every mood and genre
- Can share music from Spotify to Facebook, Twitter etc to bring people who love music together.
Target market
The target consumer of Spotify is the age group of 15-25 years old. They are mostly students or people working as full/part time jobs. The company aims at presenting an image of outgoing, tech-savvy, young and personalised. The personalised playlist function allows the users to access playlists set up on their own account, on all of their personal electronic devices such as laptops, tablets and mobile phones. This allows Spotify to be at the forefront of music streaming services and social media in the industry.
The Competitive Landscape
The music industry has a undergone a big transformation in recent years. Owing to the emergence of advancements in technology, the music industry has started to go digital. The growing popularity of smartphones, better Internet connection (4G) and the online ‘cloud’ storage for music files have all contributed to the transformation of how we buy and listen to music. These factors have generated a new market. Music streaming and subscription have become increasingly important because of the digital revolution. The digital music service can be classified into two categories: online-radio and streaming subscription services (The Economist, 2014). The subscription model has become the main trend in the music industry as a way of generating income for artists and right holders. In 2013, the number of paying subscribers has risen to 28 million, which is 40 percent higher than that in 2012 (IFPI, 2014).
Competitors
Pandora
Pandora is the pioneer in the industry and one of the biggest competitors to Spotify. It is the first streaming radio service in the music industry. The content of the service is not chosen soley by the individual user, but changes upon the votes and preferences of the users. The company is based in Oakland and the service was first launched as Music Genome Project in 1999. The online music radio company owns more than 76.2 million active monthly users currently. Its charged service costs $3.99 monthly, in which ads can be eliminated. The company has recently released a new alarm clock function, which allows users to be woken up by their own favourite station.
Deezer
Deezer is a French-based commercial music streaming company, which is a competitor of Spotify. The French company acquired the American company, Stitcher, an aggregator of podcasts and talk radio programming. The merge has made a broader range of soundtrack platform for Deezer in order to widen the global footprints. With the in-car audio services of Stitcher, Deezer tries to penetrate its service into motor market, plus the partnership with Apple CarPlay and Android Auto (Lunden, 2014).
The revenue base is different between the online music radio, Pandora, and the music streaming service, Spotify (Ferdman, 2014).
The comparison between the user bases of the two streaming service, Spotify and Deezer, in terms of proposition of user type.