SPOTIFY: ANIKA, ZACK

MUSIC sTREAMING: spotify

Anika,Zach

Index

Introduction to Spotify

Threat of substitutes

Michael Porter's Theory

Bargaining Power of Consumers

Threat of new entrants

Spotify's respsonse to Competition

Bargaining power of suppliers

Rivalry among existing competitors

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.

PORTER'S FIVE FORCES THEORY

Threat of new entrants

Bargaining power of suppliers

Bargaining power of buyers

Threat of substitutes

Rivalry among existing competitors

SPOTIFY BARRIERS OF ENTRY

COST

INNOVATION

Exclusive- Content

Word-of-Mouth

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.

Spotify encourages users to share their favorite songs and playlists on social media to expand its reach.

Spotify uses a combination of algorithms, a dynamic user interface, and a growing music catalog to stay ahead of copycats.

Spotify invests in original and exclusive content to attract new listeners and keep existing ones engaged.

SPOTIFY SUPPLIERS

Google Cloud

Record Labels

Singers supply spotify by working with ditributers. eg: record labels

SPOTIFY COMPETITORS

Youtube Music

Apple Music

Amazon Music

Sound Cloud

SPOTIFY SUBSTITUES

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 Consumer Market

• 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.

24%

34%

of Spotify listeners are from North America

of Spotify listeners are from Europe

11%

of Spotify listeners are from the rest of the world

22%

of Spotify listeners are from Latin America

Spotify's response to competition

Strenths:

Strategic Opportunities:

• Has a powerful brand name
• Agile organisational structure
• Large user base
• Provides persomalised playlists
• Flexible Financial Position

• 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.

Weaknesses:

• Lack of differentiation in music content
• Current licencing deals with music rights holders

Threats:

• A change in data collection policies that may restrict its collection of user data

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:

1. Spotify recommends certain distributors, including:
2. DistroKid
3. CD Baby
4. EmuBands
5. Record Union
6. Vydia
7. ONErpm
8. Amuse
9. RouteNote