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A Market Analysis for
Spotify Ltd.
Amanda Darling
Full Sail University
Project & Portfolio II: Business and Marketing
December 17, 2021
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EXECUTIVE SUMMARY
The below analysis report reviews the current standing of Spotify in the market and how
they can expand their product line to improve their brand. It examines how Spotify’s users and
subscribers are evolving and how they can use this to their advantage. It explores how Spotify is
doing compared to its competitors and how they can improve their technology by implementing
video streaming services to cater to their target market. This analytical data will help provide
recommendations on how to forge partnerships with other streaming services to advance their
comprehensive range of services.
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OBJECTIVE
Based on the research conducted, Spotify Ltd. can build its services by including a video
streaming service if they collaborate or forge a partnership with a popular video streaming
service. This can expand their product line and keep them in the lead as the top streaming
service.
RESEARCH METHODOLOGY
The information was mainly from online sources and databases gathered throughout
Spotify's withstanding as a company, including from 2012 to current. The research primarily
relied on external and quantitative data that explored the company's strengths and weaknesses.
Finding more external information on how Spotify can improve its app development and
engineering wasn't easy.
RESEARCH AND KEY FINDINGS
Spotify Ltd is the audio streaming app and
website that subscribers use to stream music, podcasts,
and audiobooks. They offer multiple different
subscription-based services or an ad-supported free
version. They have an individual base subscription, family-based subscription, and student-based
subscription, provided at a discounted rate for students. These subscriptions are not required, but
most users utilize the subscriptions to avoid ad-interrupted services while listening to music and
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podcast.
Spotify Ltd. has proven itself as one of
the top competitors in the music streaming
industry, with over 165 million subscribers
(Business of Apps, 2021) and growing. An
article written by The Verge stated that by the
end of the year, Spotify is anticipated to have over “400 million monthly active users, and over
177 million premium subscribers” (Porter, 2021). Although Spotify has a large target market
with the various subscriptions it offers, they cater to the younger target market within the age
range from 18-30 with their individual and student subscriptions.
“The streaming service not only holds a
monopoly over other streaming mammoths but also
over the different ways to listen to music” (Laker,
2020). With this growing population, Spotify takes
the current lead even though their current streaming services are relatively similar to other
streaming services on the market. Apple Music and Amazon Music also have an extensive music
catalog, so Spotify must make their brand stand out to consumers on why they should go with
their platform compared to the others. Haupt and Shelly (2012) empathize this by stating that
“Spotify excels at user control, device syncing, and speed. Unlike Internet radio, Spotify
subscribers really can listen to whatever they want to (if it is in the catalog) whenever they want
to. With various mobile devices, a Spotify subscriber can not only listen to tracks but also make
Spotify tracks available offline and combine them in playlists with their music purchased
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elsewhere” (p. 135). This shows they can transform their services to intergrade higher
technology to expand beyond what they currently have, such as the year wrapped up, curated
playlists, and interactive data listening.
CONCLUSIONS
Overall, Spotify has obtained great success throughout its organization. They can grow
their services with their expanding target market. This company started with the basics, as all
companies do, but has developed innovative ways to keep up with consumer needs and stand out
from its competitors. This shows through their financial history and the number of subscribers
continuously growing. However, growth opportunities are still within the horizon to keep up
with the evolving users and subscribers joining the service. Suppose Spotify evolves its
technology within the streaming service industry, especially by adding video streaming
capabilities. In that case, this can expand their services and keep them one of the industry's top
products.
RECOMMENDATIONS
The best way for Spotify Ltd. to capitalize on favorable findings is by taking advantage
of their steadily growing user and subscriber base. If they use that to their benefit, they can
implement additional product lines such as video streaming since it's a service that is in high
demand. "Millennials and Generation Xers are leading the way when it comes to the move
toward alternatives to cable TV. Sixty-three percent of Millennials watch live video, and
streaming services put that capability in the palm of their hands" (Beonair, n.d.). This shows that
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the current generation is more in touch with the evolving technology industry. Spotify can keep
up with these ways by incorporating a video streaming service related to music videos and other
broadcasts such as interviews or specific talk spaces. Since Spotify has relatively similar
products to other companies within the industry, they need to find ways to make their brand and
product lines stand out. Including a form of video streaming within the next couple of years will
bring their overall app to another level of elevation.
However, it's unknown if similar companies are in the works of doing the same. That is
why it may be essential for Spotify to collaborate with YouTube or another video streaming
service to execute this idea. If they create a partnership with an established organization that
already specializes in this expertise and technology, it would be a huge benefit. As I mentioned,
consumers want to stay up to date with the latest technology, so whatever company is keeping up
to date with the trends, the consumers will gravitate towards which will only boost their business
and brands. This would expand their services and app on a whole different level. In addition, it
would also help differentiate their brand and make them stand out from other streaming services.
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REFERENCES:
5 reasons video streaming is skyrocketing in popularity. (n.d.). Beonair.
https://beonair.com/video-streaming-skyrocketing-in-popularity
Alex Walker-Todd, Consumer Tech Editor. (2020, July 20). How much data does Spotify use?
Tech Advisor. https://www.techadvisor.com/how-to/mobile-phone/how-much-data-does-
spotify-use-3792963/
Engineering. (n.d.). Spotify. https://engineering.atspotify.com/
Haupt, J., & Shelley, A. (2012). Spotify. Notes, 69(1), 132–138. https://search-ebscohost-
com.oclc.fullsail.edu/login.aspx?direct=true&db=a9h&AN=78201444&site=ehost-live
Laker, B. (2021, December 10). The economics of music streaming and the role of music
streaming platforms. Forbes.
https://www.forbes.com/sites/benjaminlaker/2020/10/28/heres-how-lockdown-has-
shown-that-spotify-has-a-sustainability-problem/?sh=4637160a599b
Porter, J. (2021, October 27). Spotify expects to have over 400M users by the end of the year.
The Verge. https://www.theverge.com/2021/10/27/22746682/spotify-q3-2021-earnings-
podcast-music-streaming-financials
Spotify revenue and usage statistics (2021). (2021, November 11). Business of Apps.
https://www.businessofapps.com/data/spotify-statistics/
