Market & Analysis Report

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A Market Analysis for
Spotify USA
Lacanda (Candy) Mikeska
Full Sail University
Project & Portfolio II: Business and Marketing
September 1, 2019

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EXECUTIVE SUMMARY
This is an analysis report for Spotify USA, the leader in music streaming. For this
company to maintain its position as the leading digital music streaming platform, Spotify must
take advantage of growth opportunities. This also creates a more prominent gap between itself
and competitors. Spotify’s decision makers must give special attention to its target market by
implementing an elevation of products and services. Not only providing an incentive for new
subscribers, but also a reward to its already loyal audience.

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OBJECTIVE
I was hired to analyze the growth of Spotify and to evaluate the opportunities of their
product line against their competitors. It’s no secret Spotify was a company to pave the way for
digital music streaming. However, the market has grown quickly. With product expansion and
new marketing methods, Spotify aims to stay at the top.
RESEARCH METHODOLOGY
The information for this analysis was found through both internal and external sources.
Over a 30-day period I researched these sources that dated back no further than 2018. Because
Spotify keeps most financial records internally, I ran into some challenges trying to gage their
net and/or gross profit margin.
RESEARCH AND KEY FINDINGS
Spotify is a music streaming platform that first
launched in Sweden in 2008 by Daniel Ek, co-founder and
CEO. With a paid subscription you can listen ad-free. Now,
Spotify streams across 79 markets. One of which is Spotify
USA. With over 100 million subscribers, Spotify is the largest
driver of revenue to the music business today (Spotify, 2019).
The target market for Spotify’s streaming subscription
is 56% female under the age of 30 (Statista, 2018). In the age of technological advancement, it is
smart for Spotify to continue investing time in developing with TypeScript. This ensures the
development of new features is more secure and quick (Marbach, 2019).
Daniel Ek via Twitter @eldsjal

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Being of the first in music streaming
platforms, Spotify has more of an opportunity to
modify and adapt its product to become a fierce
competitor in the industry. It is important for
Spotify to be mindful of its relationships with
other technology companies, as conflicts with
competition is a weakness that puts undue stress on adoption of new products. This is capable of
creating the threat of losing artists to the competition, thus reducing the library inventory for
Spotify.
There were 217 million monthly active users
of Spotify according to their Q1 2019 report
(Business of Apps, 2019). Maintaining their
integration with social media, Spotify will continue
to grow their audience loyalty. It will also increase
the opportunity for new users to explore and commit
to the products and services Spotify has to offer.
CONCLUSIONS
To hold its position as the number one digital music streaming platform, Spotify has to be
open to product expansion directed at its current market. Now is not the time to get comfortable,
quite the opposite actually. For Spotify to project into a new market it will have to be willing to
expand its current content as well as increase the features offered. Having loyal listeners is a
great start, but Spotify needs more willingness to subscribe to services offered.
Photo by sgcdesignco on Unsplash
Photo by Sara KurfeB on Unsplash

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RECOMMENDATIONS
In order to capitalize on the favorable findings of this analysis, Spotify should zero in on
the desires of its core market. There is a lot of potential growth in giving the audience what it’s
looking for. When running into the more unfavorable findings, the company’s decision makers
will need to address the findings appropriately. Either eliminating the problem all together or at
the very least, making adjustments to alter the findings for a more favorable result.
I am working to make strategic and operational recommendations for Spotify. Paying
attention to the specific numbers in the company production and following the trending patterns
will be important for future growth. When supplying decision makers with numbers, they are
able to see where progress is being made and where improvements need prioritized.
Another way Spotify can grow their committed subscriptions is to survey or poll their
market. Asking for input from those routinely using the platform is a beneficial way to get an
inside look at the consumer’s expectations. Expanding the services provided, making the services
more user friendly, and including special features for those willing to pay for a subscription not
only increases their audience loyalty, but also gives back to already loyal listeners.
It is true, a good amount of trial and error comes with new development. There is never a
guarantee to what the given market will chase from one moment to the next. According to
investment company Needham’s statement in a 2016 article, “Spotify has become so important
as a source of revenue for the music industry that they’re now “too big to fail.’” (Needham,
2016). Though this may be true, it’s still imperative for Spotify’s decision makers to keep a
finger on the pulse of development moving forward.

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REFERENCES
(2019, August 12). Spotify Technology S.A. (SPOT) Stock Price, Quote, History & News.
Retrieved from https://finance.yahoo.com/quote/SPOT?p=SPOT
(2019, May 10). Spotify Usage and Revenue Statistics (2019). Retrieved from
https://www.businessofapps.com/data/spotify-statistics/
(n.d.). Company Info. Retrieved from https://newsroom.spotify.com/company-info/
(n.d.). Spotify users by age in the U.S. 2018. Retrieved from
https://www.statista.com/statistics/475821/spotify-users-age-usa/
KREY, M. (2016, October 6). Pandora, Spotify Said To Be “Too Big To Fail” In Discordant
Music Industry. Investors Business Daily, p. 1. Retrieved from
http://search.ebscohost.com.oclc.fullsail.edu:81/login.aspx?direct=true&db=bwh&AN=1
18650162&site=ehost-live
Marbach, P. (2019, July 03). Web-scripts – creating NPM libraries in a snap at Spotify.
Retrieved from https://labs.spotify.com/2019/07/03/web-scripts-creating-npm-libraries-
in-a-snap-at-spotify/