Swot Analysis Of Spotify

1165 Words5 Pages
BUSINESS MODEL FOR SPOTIFY A business model of a company is how they plan to make money. Spotify gathers content from right holders, distribute it to consumers through the technical platform and convert both through a free ad funded service and a subscription service. 1. Customer segments: who are our customer? Spotify aims for the mass market and for a multi sided platform. The mass market has three parts: Premium Listeners, can use Spotify on mobile and offline; Unlimited Listeners, who pay a less amount for more time to use Spotify; and the Open Listeners, have limited access, they do not have to pay but they have to listen to advertisements and also have a limited time of max 20 hours. The multi sided platform works together with one…show more content…
Spotify is able to do this by friend to friend communication. • Purchase: When customers are convinced of the rate of Spotify, they are only a few steps away from using Spotify’s services. Listeners download the application from website, whereas advertisers contact a Spotify correspondent via email or a form. • Delivery: The delivery happens through the enabling of the music streaming application for users, which depending on the account type, can happen on different devices. • After sales: The after sales of Spotify are rather limited. This means they save money in their overall cost structure. For listeners Spotify provides a self-service online help section. There is a community based support forum where customers help other customers out. Finally there is an option to send an email to the customer support service of Spotify. 4. Customer Relationships: How to relate with…show more content…
Spotify has to pay other companies to keep their own service running. Most money goes to the record companies, to buy the licenses for the music. The most important costs for Spotify are: • Licensing fees for the music/content • Salaries of workers/technicians • Expenses related to maintenance of the platform Conclusion of the Business Model Spotify created a new blue ocean for themselves by offering online streams instead of downloads and making it possible for Spotify costumers to listen to unlimited music. The most important change happened to the Freemium tier, which was more and more pushed back by music brands and record companies, they saw it as giving away their music for free, so they lowered the listening time from 20 to 30 hours and increased the length of the advertisements from 15 to 30 seconds in order to own more on advertising and force Freemium user to convert to premium users. De Baere, B., De Groote, D. and Szeridi, P. (). Spotify Solvay Case, [online], 1 November, available: https://spotifycase.wordpress.com/5-the-business-model [20 October, 2015]. Spotify. (2013). Spotify Artists, [online], available: http://www.spotifyartists.com/spotify-explained/#how-does-spotify-make-money [20 October,
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