Situational Analysis of Spotify
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Hayley Hoover, Camille Macicek, Alex Estrada, Peter Contreras, Ann Scott
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Texas Christian University
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Organization/ Brand
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Founded in 2006, Spotify is a Swedish-based streaming service. Spotify is the largest streaming service in the world with approximately 360 million monthly users. Spotify’s core mission is to promote “human creativity” which works simultaneously with its values of allowing artists the opportunity to make a living off their art and giving fans a platform where they can enjoy and be galvanized by it. Spotify focuses solely on audio streaming, tailoring playlists and recommending artists based on your listening trends.
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Industry and Key Challenges
As a platform that focuses and provides audio streaming, Spotify is categorized into the audio streaming service industry. A small number of competitors make up the majority portion of this industry’s market share. Spotify is part of a short list of services that control the market, which also includes companies like Apple, Amazon, and Sirius. The main service provided in this industry is giving consumers the ability to stream content anywhere (IBIS). Audio streaming services accrue most of their revenue from paid subscriptions. Some services, including Spotify, offer an unpaid version of their platform as well. Free versions generate ad revenue. On average, revenue has grown 18.4% annually between 2016 and 2021 in the industry (IBIS).
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One of the most defining features of the audio streaming service industry is also related to a major challenge faced by Spotify and other competing firms: the market share is extremely concentrated. There are a small number of large firms competing, but the competition is fierce. It is important to note that this is internal, not external, competition. There is little evidence that other ways to consume music, like CDs, have much of an effect on the audio streaming industry (IBIS). This high concentration makes the barrier to entry very high for new or smaller companies. However, even large players like Spotify must constantly adapt to ensure their platform stays competitive. Otherwise, they would begin losing market share rapidly as switching costs are relatively low in the audio streaming industry.
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There are a few more specific challenges related to keeping a platform competitive. Firstly, it is crucial that the platform is always current. Most importantly, it must have all the current content that customers want to consume (Jansson). This is why streaming services pay artists and other content creators so much for exclusive brand deals; being the only platform that streams that specific content can be a major selling point. Services must also stay current in regard to technology. Technology is evolving rapidly, so a streaming service will not be able to compete if the technology behind its platform is lagging in comparison to its competitors (IBIS). The major competitors all have great platforms, so it is things like this that “break the tie” in the eyes of the consumer.
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There are also major challenges associated with designing and growing a streaming platform. Audio streaming services need to understand the psychology of the consumer in order to be successful. Research shows that creating a platform that provides a sense of ownership is a very important psychological factor. Personalization is key here; the consumer wants to feel as if the platform was made for him or her (Danckwerts). This is an interesting challenge, but Spotify has done a great job solving it through features like “built for you” playlists and its end of year wrap.
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Besides building the platform itself, successful marketing is one of the largest challenges in the audio streaming industry. This is especially true for new companies who need good marketing to drive subscriptions. Conversely, marketing is not nearly as important for companies that already have a large market share. According to IBIS, successfully marketing a platform is the largest challenge in driving new subscriptions. Without it, a platform will never gain market share. Very few companies succeed in marketing their platform, though, hence the streaming industry’s high concentration.
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Stakeholders
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Spotify has done an excellent job navigating the audio streaming industry, using successful marketing tactics to situate itself as a top influencer. Though the individualized marketing campaigns have proven prosperous, Spotify would cease to exist if it did not have a strong financial foundation to grow from.
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Spotify has 1,041 institutional owners and shareholders, holding a total of 135,347,767 shares (Spot). The primary stakeholders take the form of institutional investors. Institutional investors are companies or organizations that buy, sell and manage stocks, bonds, and other securities, investing money on behalf of a client (Chen). Institutional investors have resources and extensive knowledge on a variety of investment opportunities not typically open to retail investors, making them able to “move markets with their large block trades” (Chen). Spotify has six top institutional shareholders, holding the majority of Spotify’s shares at roughly 55-75% of total shares (Johnston). The investors include Daniel G. Ek, Sven Hans Martin Lorentzon, Baillie Gifford & Co., Morgan Stanley, Tencent Holdings Ltd., and T. Rowe Price Associates Inc.
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Daniel Ek owns 32.7 million shares of Spotify, accumulating to 17.2% of the total shares outstanding as of February 2021 (Spot). Daniel Ek is the co-founder and CEO of Spotify. After dropping out of college and working for several Web-based companies, Ek established Spotify in 2006 with Martin Lorentzon. At the age of 38, the Swedish billionaire has leverage on the company not only due to his substantial shareholding, but as a co-founder who has grown with the company, Ek oversees the business operations and has led Spotify to its incredible status (Johnston).
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Sven Hans Lorentzon owns 21.1 million shares of Spotify, accumulating 11.1% of the total shares outstanding as of February 2021 (Spot). Lorentzon is the co-founder and current vice chair. As Spotify Vice Chair, he designs and implements strategies, budgets, and goals. At the age of 52, Lorentzon has an extreme influence on the future of Spotify, working alongside his partner, Daniel Ek.
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Baillie Gifford & Co. own 20.7 million shares of Spotify, accumulating 10.9% of the total shares outstanding as of January 2021 (Spot). Baillie Gifford is an investment management firm that works to manage a diverse set of mutual funds with more than $370 billion in assets under management (AUM). Spotify sits amongst the firm’s top ten holdings, representing roughly 3.2% of the firm’s total assets (Johnston).
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Morgan Stanley owns 17.2 million shares of Spotify, accumulating 9.1% of the total shares outstanding as of February 2021 (Spot). Morgan Stanley is a multinational investment bank and financial services company that offers a diverse range of mutual funds with more than $715 billion in AUM. Spotify sits amongst the bank’s top ten holdings, representing roughly 4.6% of the fund’s total net assets (Johnston).
Tencent Holdings Ltd. owns 16.6 million shares of Spotify, accumulating 8.8% of the total shares outstanding as of December 2019 (Johnston). Tencent is a China-based multinational technology holding company with subsidiaries that provide networking, e-commerce, mobile games, Internet services, payment systems, and entertainment. Spotify sits amongst the company’s top ten holdings (Johnston).
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T. Rowe Price Associates Inc. owns 14.2 million shares of Spotify, accumulating 7.1% of the total shares outstanding as of September 2020 (Spot). T. Rowe Associates is a subsidiary of T. Rowe Price Group Inc., a global investment management firm with nearly $1.3 trillion in AUM. The largest of the company’s exchange-traded funds, T. Rowe Price Blue Chip Growth ETF has $66.8 million in AUM; Spotify represents 0.6% of the fund’s total assets (Johnston).
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The top six institutional investors hold roughly 106,292,669 of Spotify’s 135,347,767 institutional shares. The secondary stakeholders include the other 1,035 institutional owners and shareholders who hold approximately 29,055,098 institutional shares (Spot). The secondary stakeholders do not have nearly as much leverage as the top six, and therefore do not have as much power or influence on the company. However, all institutional owners and shareholders are important to the foundation of the company because their support and holdings help establish Spotify as a powerhouse with an institutional value of $65,317,902 (Spot).
Now that we have established the main stakeholders of Spotify, it is important to understand exactly who the organization is primarily concerned about marketing towards.
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Target Audience
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Spotify’s operating model emphasizes the importance of subscriptions. Spotify offers two subscription plans for listeners: a premium account that requires a monthly payment of $9.99 and an ad-supported free account that lacks several of the premium perks. Spotify has over 365 million total monthly active users; 210 million are advertising-supported subscribers and 155 million are paid subscribers (Clapp). The revenue from premium accounts has consistently represented more than 85% of the total company revenue for the past five years (Kennedy). Even though there are more advertising-supported users, because paid subscribers represent more revenue for the company, paid subscribers are Spotify’s primary audience.
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Gen Zs and Millennials are Spotify’s target demographic. Regardless of which type of audio they are consuming, “both generations are exploring all the ways audio can enrich their lives” (Audience Targeting). Gen Zs are individuals between the ages of 15 and 25. They are visual consumers with short attention spans who grew up on the internet, spending anywhere between 80 minutes and 150 minutes a day streaming audio (Audience Targeting). 38% of Gen Zs describe themselves as global citizens and 48% turn to audio to escape their excessive screen time (Audience Targeting, Carruthers). Millennials are individuals between the ages of 26 and 40. They are ambitious and self-reliant individuals who are passionate about the things they care about. 83% of millennials in the US use audio as a stress reliever and 72% believe they are building a better society (Audience Targeting).
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The first trend for Gen Z and Millennial listeners is that they are using Spotify to enter a sound escape, using audio as a mental health resource to reduce their stress levels and become more centered (Audience Targeting). The second trend for Gen Z and Millennial listeners is using Spotify to immerse themselves in sound, blurring the lines between tangible and virtual, bringing audiences together at a distance (Audience Targeting). Due to all the visual distractions of the world, these groups are extremely desensitized individuals, but audio has the unique ability to “get inside you” that other forms of streaming do not (Audience Targeting). The third trend for Gen Z and Millennial listeners is using Spotify and the influence of social media to create communities between musicians, podcasters, and audiences over shared passions (Audience Targeting). The ability to participate in fan communities has shaped the sense of belonging and identity of young people by sharing music recommendations and growing in music tastes.
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Geographically, Europe has steadily held the highest number of Spotify users. In 2021, Europe had roughly 121 million subscribers, North America had 85 million subscribers, Latin America had 78 million users, and the rest of the world accumulated 71 million users (Spotify Revenue).
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Spotify’s secondary audience is its ad-supported subscribers who operate under a free account. This secondary audience is crucial in understanding subscribers’ listening behaviors and using this information to better provide and support loyal consumers, hopefully becoming paid subscribers in the future.
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As an audio streaming platform, Spotify has the unique ability to help advertisers reach their niche audience through their ad-supported subscribers. Because it is of no cost, any individual can use Spotify and be exposed to the different advertisements offered. Spotify’s advertising model enables “advertisers to reach listeners across devices, moments, and formats as they engage with their favorite music and podcast content” (SpotifyAdvertising).
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Through their audience targeting program, advertisers can identify users through their devices, finding them “within different moments and contexts throughout their day,” telling compelling stories that will resonate with all types of listeners (SpotifyAdvertising).
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Additionally, by using Spotify’s database of historical listening behavior, real-time targeting can be used to deliver messages at specific moments that fulfill the listeners’ interests, creating impactful moments of connection. Advertisers can select the specific demographics they are looking to target, the device their audience will be connected with, and list behavioral patterns and interests to use Spotify as a facilitating mechanism to reach the most desired audience for specific products.
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Competition
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Now that we have identified the key stakeholders and audience of Spotify, it is important to understand how brands within the audio streaming industry in the US vie for the attention of these various stakeholders and listeners. This industry is highly competitive, and brands face the challenge of a high barrier of market entry, fighting for market share, and keeping up with consumer demand. Spotify is a major player in this highly competitive industry (Kennedy).
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Major players make up 82.9% of the market share concentration in the industry, and minor players take up the remaining 17.1% (Kennedy). At 30.5%, Spotify has the largest share of market concentration (Kennedy). Other major players include Apple Inc. with 19.8%, Sirius XM Radio Inc. with 15.2%, Amazon.com Inc. with 11.4%, and Alphabet Inc. with 6.0% of market share concentration (Kennedy). Some other bigger players include Pandora and Google LLC. Relevant smaller players include iHeartMedia and Tidal (Kennedy).
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In addition to being highly competitive, the audio streaming industry in the US is highly concentrated. In 2021, 76.9% of revenue in the industry came from the top four players: Spotify, Apple, Sirius XM, and Amazon (Kennedy). This high concentration contributes to the high levels of competition. New players in this industry are at a disadvantage due to high barriers to market entry. As a result, major players in the audio streaming industry continue to dominate (Kennedy).
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Key players in the audio streaming industry use different pricing strategies to generate revenue. Most major players utilize one of two models. The first model focuses on paid subscriptions while the second emphasizes ad-supported subscriptions (Kennedy). According to a Mintel study of 936 internet users age 18+ who use a music streaming service, 36% of users use a mix of both free and paid music streaming services, 43% only use free music streaming services, and 21% only use paid streaming services (Lo).
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As mentioned, more than 85% of Spotify’s total company revenue in the past five years comes from premium accounts (Kennedy). As a result, the company is dependent on expanding membership as well as retaining its current user base. Pandora focuses on ad-supported subscriptions, and less than 30% of its revenue comes from paid subscriptions (Kennedy). One major downside for listeners on Pandora is that they cannot choose a specific song to listen to, but rather a specific artist or genre. Competitors, such as Spotify and Apple Music, allow for a more personalized experience in this regard (Kennedy).
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With 19.8% of market share concentration, Apple Music is a key competitor in the audio streaming industry in the US (Lo). Apple Inc. transitioned from iTunes to Apple Music in 2015, and the streaming services reached 60 million active users by June of 2019 (Lo). Similar to Spotify, Apple Music costs $9.99 per month -- the industry standard -- with student discounts and family plans. Unlike Spotify, the service does not include a free, ad-supported version. Another limitation of the service is that it is largely limited to Apple product owners (Lo).
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Spotify stands out from the competition due to its emphasis on music discovery. In addition to their personal playlists, listeners can stream computer-generated playlists like Release Radar and Discover Weekly to introduce them to new music based on their current library (Lo).
Current Situation
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Over the last year, Spotify has seen tremendous growth. While the shutdowns hurt many businesses, Spotify was one of the companies that really thrived. The effects of the Covid-19 lockdowns were followed by the growth of many media streaming platforms. As more and more people were ordered to stay home because of pandemic protocols, the more time people had on their hands to watch movies or listen to music in their downtime. In the first quarter of 2020, the platform gained over six million new premium subscribers and the amount of total monthly Spotify users increased by 31% to over 286 million (Spangler). The stock peaked on February 21, 2021, at $365.99 per share, but was immediately followed by a 35% decline from late February until mid-May; the decline was in direct correlation with covid vaccines. During the same period, the number of fully vaccinated Americans jumped from 5.6% (18.9 million) to 36.6% (123 million), a 31% increase (Our World In Data). Spotify’s stock is now averaging about $245 per share, nearly double its average before the pandemic (CNBC). Despite the decline, the fact still stands that Spotify has grown tremendously and has proved to be resilient through adversity.
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Along with their user and stock growth, Spotify is growing in other ways too. The company originally started as a music streaming platform but has been steadily transitioning into an audio streaming platform. Spotify introduced podcasts to its arsenal in late 2018, and the new media is becoming very popular on the platform with over 1/3 of Americans now listening to podcasts monthly (Edison Research). This transition has been propelled by Spotify making deals with many creators to stream exclusively on its platform, including some of the top podcasts in the nation like The Joe Rogan Experience, Call Her Daddy, and Armchair Expert with Dax Shepard (Edison Research). Joe Rogan’s podcast alone had a massive effect on the company’s stock, bumping it up 8% on the day it was announced to stream exclusively on Spotify (Bursztynsky).
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Recently, Spotify has followed in the steps of other entertainment streaming services like Netflix with the creation of exclusive original content in the form of podcasts, music, and, most recently, scripted audio. In 2020, Spotify partnered with Warner Brothers and DC to bring audio storytelling to life in an exclusive series called Batman Unburied, which is scheduled to release in late 2021. The transition into audio presents many possibilities for Spotify; there are talks of possibly tapping into markets like news, sports, and other forms of live audio. The release of their app Spotify Greenroom in late 2020 was their first leap into live audio. The app is designed like a social network; in the app, users can join interest groups and participate in live conversations with others on the topic. Greenroom provided a way for users to connect with real people amidst the pandemic, virtually simulating events that could not be carried out in a physical setting for safety reasons.
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To keep up with their growth and expansion into new markets, Spotify CEO Daniel Ek is focusing a lot of his time and energy on courting creators. He believes that “by the end of 2025 we could have as many as 50 million creators on the platform” (Gray). Spotify has a very creator-driven vision set before them, and they are striving to enable “1 million creators to live off their art and connect them with over a billion consumers globally” (Vogel).
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With this in mind, it is important to note that Spotify has had relationship issues with its creators in past years. Spotify received backlash from some of its creators, most notably Taylor Swift, for not compensating them enough for their art. Swift disagreed with the perception that “music had no value and should be free”(Ingham). Swift removed her entire discography from the platform in protest of Spotify’s ad-funded “free” tier (Ingham). In response, Ek made a blog post stating that “Spotify is not the enemy, piracy is the enemy … Our whole reason for existence is to help fans find music and help artists connect with fans through a platform that protects them from piracy and pays them for their amazing work” (Ingham). Spotify was originally a solution for Taylor Swifts' issue of artists not getting paid for their work. Spotify was the first platform to offer both paid and free subscriptions for their services, each with its own set of capabilities. Other paid-only music subscription services never took off because users were getting the same product for free on piracy sites. Spotify needed to offer a “free” ad-funded version to tap into the market of people who were pirating music. Having a terrific free tier would be a way to attract fans and get them in the door. The ultimate goal is to have them become a premium subscriber; thus, converting a pirating fan into a paying fan. Ek was able to express his frustrations with the industry and empathize with Swift. He stated that “we will do anything we can to work with the industry to increase transparency, improve the speed of payments, and give artists the opportunity to promote themselves and connect with fans – that’s our responsibility as a leader in this industry, and it’s the right thing to do” (Ingham).
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Since then, Spotify has improved its relationship with creators as it pertains to compensation. The platform now offers a feature called “Artist Fundraising Pick,” where fans can pay artists directly through a Cash App link on their page; no portion of the contribution goes to Spotify, making it a great resource for smaller artists. “In an effort to draw more creators to the platform, Spotify is not taking a subscription revenue cut for the next two years. The company said participating creators will receive 100% of their subscriber revenues, excluding payment transaction fees. Starting in 2023, the company will charge a 5% fee for the tool.”(Bursztynsky). With the efforts that Ek is making to enhance relationships with creators, Spotify is on its way to having one million artists live off their work. This goal is good for all parties, and will surely attract more creators, getting them closer to 50 million. With the current situation established, we will now detail the company’s internal and external factors.
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Internal and External Factors
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It is important to understand and contextualize the brand’s current situation before learning about internal factors. Various internal factors work together to contribute to Spotify’s current situation. The company’s organizational structure, which focuses on team efforts with the goal of sharing and integrating knowledge, contributes to company research efforts and the development of innovative and competitive services (Brown). Many current research and development efforts reflect the brand’s current focus on podcasts and other types of audio beyond just music.
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Spotify implements an n-form organizational structure with the ultimate goal of sharing and integrating knowledge. This structure reflects some of Spotify’s core values such as innovation and collaboration (Moore). Characteristics of the brand’s organizational culture include being team-oriented, open and trusting, idiosyncratic and quirky, and contextual (Moore). Teams of employees work together to produce innovative ideas that will keep up with the current needs of consumers. Communication among and within these teams must be open and trusting so that there is a more genuine flow of ideas and less of a sense of hierarchy. Idiosyncrasy and quirkiness emphasize creativity in ideas and knowledge sharing amongst employees. Finally, the greater context of the organization and consumer demand rules the organizational culture because the culture must adapt to changes out of the brand’s control (Moore). In order to do this, the brand must rely on flexible internal factors, like its organizational structure, to acclimate.
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Spotify employees work in groups, called “squads,” and these “squads” work in larger groups called “tribes.” Other groups, known as “guilds,” are comprised of employees from different “squads” and “tribes” who have similar skill sets (Brown). Within these groups, managers and other company higher-ups are spread out so that groups are based more on the principles of a heterarchy, where employees are not ranked in a hierarchical way, as opposed to a strict hierarchy of leadership (Brown). Additionally, horizontal lines of communication allow for collaboration among the various “squads,” “tribes,” and “guilds” to maintain consistency and increase the spread of knowledge (Brown). This collaborative organizational structure allows for employees to share ideas and implement new brand developments, which improves the quality of Spotify’s services to both listeners and creators. This structure also allows for flexibility so that the brand can adjust to current business needs and stay ahead of the competition.
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Various research efforts from the Spotify Research and Development (R&D) side of the brand reflect Spotify’s commitment to innovation, especially around podcasts. This reflects the current situation of the brand, which signals a shift from just music to other forms of audio. Spotify’s research mission is to “define what state of the art means in audio and machine learning” (“Spotify Research”). The brand seeks to “develop novel research ideas, evaluate their performance on real data, and build tools, systems, and products that apply these ideas at Spotify-scale” (“Spotify Research”). Key research areas include algorithmic responsibility, audio intelligence, evaluation, human-computer interaction, machine learning, language technologies, music creation, search & recommendations, and user modeling (“Spotify Research”).
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For example, a study from Spotify’s R&D department examines the ideal language for podcasts to predict engagement. The study includes qualitative research into how different aspects of language in a podcast can contribute to engagement from listeners, looking at things like vocabulary, diversity, distinctiveness, emotion, syntax, and more (Reddy). This information is especially useful for podcast creators. In order to increase the number of podcast creators on the platform, Spotify has developed various new initiatives, such as Anchor.
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Anchor, which was acquired by Spotify in 2019, features various tools for podcast creators including hosting, distribution, analytics, insights, and a range of subscription pricing (“Tools to power any podcast”). The analytics from Spotify are especially helpful because they are IAB 2.0 certified. This means that they adhere to certain standards which ensure accuracy between different hosting services so that content creators can get a clearer measurement of engagement (“Tools to power…”). In 2020, Anchor accounted for 80% of new shows on Spotify, which is over one million new shows on the platform (“Spotify’s Anchor Innovations…”). Other innovations include the Spotify Audience Network, which is an advertising marketplace where advertisers of all different sizes are able to connect with consumers through Spotify’s range of original podcasts and other cooperating podcast networks such as Megaphone; this benefits creators, consumers, and advertisers (“The Latest…”). Creators can cater the advertising to their listeners, and advertisers have a greater reach (“The Latest…”). These actions and developments are examples of Spotify’s efforts to adapt to current situations and make strategic moves that will satisfy stakeholders. By utilizing the organizational structure to produce innovative services for podcast creators, the brand is focusing on the expansion into new media.
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With Spotify’s ultimate goal of sharing and integrating knowledge, they are able to seamlessly integrate their internal resources as a leveraging tool to advance. These internal factors help shape Spotify into an individualized advertising machine, creating mutually beneficial relationships that help maintain and plan for future endeavors. Unfortunately, not all factors can be strategically planned for, some external factors can occur that the organization does not have any control over.
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In recent years, Spotify has been impacted by two main external factors: COVID-19 and Apple’s app store. As discussed earlier, COVID-19 created more free time for busy individuals to turn to audio streaming, increasing premium subscribers by six million. Though the pandemic caused extensive harm to businesses across the globe, Spotify was lucky enough to benefit from this factor they had absolutely no control over.
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Spotify has not always been so lucky when dealing with external factors. A logistical factor that Spotify has no control over includes the distribution method of the app. Apple requires a “30% commission on all sales made through the app store,” allowing Apple, a direct competitor of Spotify, to profit (Apple’s). The store is an important distribution platform for Spotify, but if a user signs up for the premium service on the company’s website, they can bypass the app store and as a result, the correlating fee. This external factor influences Spotify’s PR situation because it is important to communicate to users that signing up for the service directly on the Spotify website is preferred. For example, in 2016, Spotify released an entire ad campaign that projected this sign-up message (Apple’s). Spotify argues that Apple has an unfair advantage to change the prices to benefit their subsidiaries, creating a frustrating situation that Spotify can legally do nothing about.
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SWOT Analysis
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Now that there is a foundational understanding of Spotify’s business mechanics and development, it is important to look at how internal and external factors interact with each other through a detailed SWOT analysis. The SWOT analysis helps create a strategic planning technique by looking at the company’s strengths, weaknesses, opportunities, and threats.
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Strengths
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Spotify leads the audio streaming industry with a market share of 35% (Statista 2021). Spotify is projected to stay the leader for the foreseeable future. Additionally, Spotify is the most widely used streaming app for listening to podcasts. Unlike other streaming services that are part of huge companies that focus on a handful of products, Spotify’s only product is streaming audio. Spotify has also been extremely successful in targeting a younger demographic (12-34) (Statista 2021).
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Weaknesses
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Operating income has been one of Spotify’s main obstacles. For the past seven years, Spotify’s operating costs have exceeded gross profits. Another issue that is at the forefront for the company is the lack of diverse representation in the workplace. Spotify reported that only 6.1% of its staff are Black and 5.5% are Hispanic (Statista 2021). The streaming service has also faced criticism several times for the small amount it pays artists per stream.
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Opportunities
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There are many opportunities presented with the transition from music to audio. A great new market for Spotify to enter would be audiobooks. This service may call for a new subscription bundle with a higher price tag, but it would really round out the platform's audio features. Spotify can also take advantage of live audio and provide live radio for news, sports, and entertainment. Additionally, there is also an opportunity for live events and tour planning; Spotify can take advantage of its users’ demographics and psychographics to optimize tour routes for artists with more niche fan communities. An analysis of fan geography could show artists what cities would have the best turnout, thus maximizing profit.
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Threats
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The largest threat to Spotify is its largest competitors: Apple Music and Amazon Music. Third-party pirating is also a dangerous threat to Spotify’s paying subscriber base. This threat not only cuts into profits but also results in artists being hesitant about putting content on the platform. Finally, security issues are a significant threat as Spotify has a history of being hacked with an estimated 13% of all Spotify accounts being for sale on the black market (IBIS).
Spotify’s SWOT analysis helps build an overarching plan to create a stronger company. By identifying strengths and using internal factors to emphasize them, Spotify can continue to grow its subscriber base and remain the top market shareholder in the audio streaming service industry. By identifying weaknesses, Spotify can be prepared for obstacles before they turn detrimental. Spotify has earned its seat as the top audio streaming service in the world, and by conducting an extensive situational analysis, the company can use the compiled research to advance even further in the industry.
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References
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