Company Project : Spotify AB
Table of content
Introduction : p.3
1- : Historic and relation wih majors : p.3
1.1 Historic : p.3
1.2 Relation with majors : p.3
2- : The way its product is produced and marketed : p.4
2.1 A service : p.4
2.2 Three offers : p.4
2.3 Position on the market : p.5
2.4 How the product is marketed : p.6
2.5 An international offer : p.8
3- : Its objective and the evolution of its financial results over the last 2 years : p.9
3.1 Figures : p.9
3.2 France : An exceptional case : p.10
3.3 The global situation : p.11
4- : The organizational form of the business : p.11
4.1 A muting company : p.11
4.2 A functional organization : p.12
4.3 A geographical division : p.12
4.4 A
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This model is quite common on the internet with streaming music providers (Spotify, Deezer) but also in video games with free-to-play games. Regarding Spotify the freemium model is composed of three offers :
-The first one completely free where users have the basic functions (listening to music on computer, with advertisement)
-The Unlimited offer where users no longer have the advertisement restriction but can only listen on their computers : 4,99€/month
-The premium offer where users have no restriction and can listen on every device (computer, smartphone, tablet) without internet connexion needed (music is stocked in the cache of the device and is available thanks to data synchronisation) : 9.99€/month
It should be noted that, in France and only in France, in the first offer the unlimited music (with adds) is not completely unlimited. Indeed, six months after the registration on Spotify (the registration is mandatory to listen to music) there is a time limitation, users will not be able to listen more than 10 hours of music per month and can’t listen a track more than 5 times. However it 's easy to bypass this restriction by creating another account with another e-mail address. Thus, it is not this time restriction that will particularly push the customer to upgrade their account.
Furthemore the upgrade from the first offer to the Unlimited or Premium offer entails an upgrade of the sound quality from 160 kbit/s to 320 kbit/s. Again, it is not this specific
to allow its users to access Spotify from anywhere through the use of mediums like
- Spotify advantages over other legal music streaming services include free subscriptions, easy to use, able to use on multiple devises, and it has a large music catalog.
I believed the basic aim of these websites were to digitally respond reasonable to the technological changes of how music was conveyed to drive sales In a positive manner but musician ended up getting a small fraction of the income receive from streaming videos and audio songs as royalties. I can personally testify to this with my personal attitude towards many popular songs I downloaded for free online that I heard for the first time on radio. In his article published in the New York Times on January 2013, Ben Sisario commented on how online streaming has hurt the industry and partially reduced sales. According to him, Many consumers has greatly welcomed this system citing them as a smart way to save money since streaming saves them more money than buying the physical album. This will virtually hurt the artist survival unless they are engaged in an important side business for survival. ( Hartwig Masuch, chief executive officer of BMG rights
To get higher quality of music you need to pay a subscription every month or can stick with a standard version but u got to subire the advertise that keep comes every 3 music that it’s pretty annoying because it keep interrupts the experience of listening to music another downside of the standard version is that when a playlist or an album is played its all shuffle ( random) and you cant choose your next song, Spotify will select it for you and you but the worst thing of the the standard version is that you cant plau music offline, that’s mean that you have to be connect online all the time and by doing this it takes lots of battery percentages of your
Pandora originally started with a subcription type of business model wherein users must pay $36 per month after they have used up their 10 hours of free access. The original model used was the free trial type. What happened was after the free trial of 10 hours was used up, the customers were unwilling to pay for the subscription fee. Now, the new and current model being used by Pandora is the freemium business model. The new model offered users longer time limit in using their features, which could be used again in the next month and
This case study about the Spotify business model allows a broader vision of what the digital music industry is. In a short time, many companies have developed and managed marked their territory in a highly competitive industry. The start-up Spotify has undergone a remarkable evolution in a financial point of view but also in terms of its popularity. Its various competitive benefits regarding the market leader and its respect for music labels have enabled the company to be renowned and to have a reputation in the real business. Today, five years after its creation, Spotify is certainly criticized in some aspects of
3-4). While these statistics provide a look into the numerical growth of the streaming industry, it is also important to discuss the power that these streaming services have generated—over both the music industry and over established/aspiring artists. Subscriptions are on the rise, having increased significantly over the past ten years, but as is the amount of users streaming music on a free-trial or ad-supported basis—ultimately undercutting the music industry and artists alike. Blewett and Gollogly (2017) elaborate on this point, stating that, by the end of 2016, paid music streaming subscriptions drove a revenue growth of 60.4%—this growth more than offsetting a “20.5% decline in downloads” and a “7.6% decline in physical revenue” (Blewett & Gollogly, 2017, para. 4). Moreover, Borja and Dieringer (2016) explore the concept of streaming even further in their academic article, positing that the decline in paid digital downloads may be a direct result of streaming—as, music streaming can be perceived as a “complement” for music piracy, in which listeners can freely sample music to pirate later on (Borja & Dieringer, 2016, p. 1). The authors also suggest that streaming can provide a “venue for discovering and listening to new releases”; and after completing their 1052 surveys, conclude that streaming increased the likelihood of piracy by
The "business side of music is struggling to generate enough revenue because of the new technology" ("How the Internet Changed Music."). "Most of the people who are part of making a record are paid in royalties, and anytime music changes hands without money being involved, those royalties can’t be paid—which is why so much has been done in recent years to try and reduce music piracy"("How The Internet Changed Music."). iTunes and Amazon has helped by offering cheap downloads for single songs, which allows the customer to only purchase songs they like rather than the entire album ("How the Internet Changed Music."). Spotify and Pandora, who offer either ad-based or paid subscription streaming of their music libraries, are Internet radio stations which have also helped with the piracy problem ("How The Internet Changed
Radiohead, one of the most popular and contemporary bands of this period, attempted a significant break from the industry standard of fixed price music. In 2007, Radiohead had planned release of its new album, “In Rainbows”, exclusively as a digital download on the band’s website, with an innovative pricing option of allowing its buyers to decide on how much they wanted to pay for the music. Radiohead’s “name-your-own price” pricing model for its new album generated an intense speculation about the future of recorded music industry. The key issues with Radiohead’s innovative distribution model and my views after an analysis of these issues are as follows:
When speaking economically, the digital music sector of the international music industry is undoubtably the most important sector in the industry. Within the last decade, music has seen cardinal changes in the way both major and independent labels distribute their products. An industry that once relied on Payola 's and mass distribution of physical records and CD 's now relies heavily on the power of the internet. The first instance of mass distribution of music through the internet was by the service Ritmoteca.com in 1998 [1]. Ritmoteca had a library of over 300,000 songs, offering individual songs for 99 cents each and albums for $9.99. After signing distribution deals with many major music labels such as Warner
Spotify was started to provide commercial music streaming services with facilities to search and browse music as well as download. Spotify has various opportunities in increasing the size of the company to a wide area. There are also opportunities in creating interactive websites and providing the customers with extra games and offers. However, there are various challenges to meet these opportunities which may include investments and customer issues. There are two recommendations for Spotify, first is to develop a mobile application for smart phones and second is to create new offers along with online gaming. This will foster growth in the Spotify’s reputation in the market.
Spotify’s mission is to connect millions of people with their favorite songs and create a service that people love to use. They believe that music should be easily accessible for everyone, as listening to music may enrich peoples lives. They want to make a win-win solution for both the people who are creating the music and the people who wish to listen to the music.
Spotify is a product of change. Consumers today are not the same as they were fifty years ago. Businesses like Spotify know this and use it to their advantage. According to industry expert Dave Touve, “people pay more, on average, for
Downloaded an average of 12 tunes per month, housing libraries between 25 to more than 300,000 songs from the internet
Downloaded an average of 12 tunes per month, housing libraries between 25 to more than 300,000 songs from the internet