SPOTIFY: ANIKA, ZACK
Anika
Created on October 7, 2024
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Transcript
Anika,Zach
MUSIC sTREAMING: spotify
Spotify's respsonse to Competition
Bargaining Power of Consumers
Threat of substitutes
Rivalry among existing competitors
Index
Bargaining power of suppliers
Threat of new entrants
Michael Porter's Theory
Introduction to Spotify
SPOTIFY
- Spotify is a swedish music and media service providing application.
- Founders: Daniel Ek and Martin Lorentzon
- The streaming app, whose name is a combo of “Spot” and “Identify”, provides users with millions of music titles and podcasts in every imaginable genre.
- The brand concept is to give users an easy way to find and enjoy the music and audio content they love, on demand. And it works.
Bargaining power of buyers
Threat of substitutes
Rivalry among existing competitors
Bargaining power of suppliers
Threat of new entrants
PORTER'S FIVE FORCES THEORY
Spotify encourages users to share their favorite songs and playlists on social media to expand its reach.
Word-of-Mouth
SPOTIFY BARRIERS OF ENTRY
Spotify invests in original and exclusive content to attract new listeners and keep existing ones engaged.
Exclusive- Content
Spotify uses a combination of algorithms, a dynamic user interface, and a growing music catalog to stay ahead of copycats.
INNOVATION
Spotify adapts its prices and payment systems to local markets. For example, Spotify Premium is more expensive in Europe and North America than in Asia, Africa, and South America.
COST
Singers supply spotify by working with ditributers. eg: record labels
Record Labels
Google Cloud
SPOTIFY SUPPLIERS
Sound Cloud
Youtube Music
Amazon Music
Apple Music
SPOTIFY COMPETITORS
While Spotify remains at the top for being the most used global music streaming website- some people prefer to listen to music independent of their mobile phones/computers.Therefore, there is still a fraction of people who use CD's. Walkmans. MTV etc.
SPOTIFY SUBSTITUES
- The Spotify target audience is located worldwide, with more users in Europe than any other region.
- The typical Spotify user is young adults – Millennials and Gen Z – however there is not a small audience of older adults aged 55+ who also enjoy the app’s music.
- The Spotify audience skews more female than male – 56% female to 44% male – and the average user is loyal, spending around 118 minutes a day listening to Spotify.
- In 2020, Spotify was the most popular online music service in the US for those aged 12 to 34. In contrast, the over 55s Spotify age group of users makes up 19%.
- Spotify’s freemium subscription is highly popular among younger users – 71% of people using Spotify for free are under 35 years old.
of Spotify listeners are from the rest of the world
11%
of Spotify listeners are from Latin America
of Spotify listeners are from North America
24%
22%
of Spotify listeners are from Europe
34%
Spotify Consumer Market
- A change in data collection policies that may restrict its collection of user data
Threats:
- Lack of differentiation in music content
- Current licencing deals with music rights holders
Weaknesses:
Spotify's response to competition
Strategic Opportunities:
- Spotify has the opportunity to differentiate its product by producing oringinal content to e exclusively availanle on the Spotify platform. This will lower Spotfy's cost structure and increase differentiation.
- The other alternate strategic option for Spotify is to lower its prices to gain new users in the emerging markets. This low-cost strategy would set prices below the competition to gain market share.
Strenths:
- Has a powerful brand name
- Agile organisational structure
- Large user base
- Provides persomalised playlists
- Flexible Financial Position
thank you!
GOOGLE CLOUD
Spotify uses Google cloud for a variety of purposes including:
Data management: Spotify uses GCP's BigQuery to process and analyze large amounts of data, which helps with personalized music recommendations and user experiences. Event delivery: Spotify uses Cloud Pub/Sub to gather and forward events to its ecosystem. Data processing: Spotify uses Cloud Dataflow to power its ETL workloads. Developer tools: Spotify and Google Cloud have worked together to develop and optimize Google Cloud technologies to help Spotify grow and scale.
DISTRIBUTERS/RECORD LABELS
If an artist is signed to a record label, the label will likely use a distributor to get their music on Spotify.Preferred distributors:
- Spotify recommends certain distributors, including:
- DistroKid
- CD Baby
- EmuBands
- Record Union
- Vydia
- ONErpm
- Amuse
- RouteNote