Market Analysis Report

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A Market Analysis for
Spotify
Geraldine Vargas Cantres
Full Sail University
Project & Portfolio II: Business and Marketing
June 26, 2019

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EXECUTIVE SUMMARY
This analysis report looks at the current market in relation to Spotify. It looks at the growth of
streaming and the affect these are having for Spotify’s revenue. The report has an overview of
the company; Spotify’s relation to other streaming services are also reviewed. The report
includes recommendations on how Spotify can increase their revenue and increase there presence
in today’s music streaming industry.

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OBJECTIVE
Based on its current market, suggest ways in which Spotify could increase their presence
in the industry and increase their revenues.
RESEARCH METHODOLOGY
Information used in this report is mostly external, secondary information from the
internet and online data bases during the month of June 2019. The information is as current as of
2017. Information on Spotify was based on recent year-end figures from 2018.
RESEARCH AND KEY FINDINGS
Spotify is a music streaming
company founded by Daniel Ek and
Martin Lorentzon in Stockholm,
Sweden. They are the pioneers of
music streaming sense they first
appeared. They have lots of different
music from around the world and
depending on the region of location.
Spotify, is not financially secure, as of December 31, 2018 they have a net income of -78,000
(Yahoo!, 2018) and a net profit of -0.91%.

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Spotify is strong in there audience reach with 22% reach per month. Putting them just behind
Apply Music, whom have a 23% reach. Giving Apple Music a 1% advantage over Spotify
(Hwong, 2018).
Though Spotify is not profitable now, there is hope that in the future they will be. As majority of
Spotify’s revenue comes from subscriptions, this can become a challenge in the future. What
with them not having a large market share because of saturation in the streaming music industry.
All there hope turn to advertisement on there platform and there subscriptions. There are also the
rules of streaming in regards to the use of music on there service.
CONCLUSIONS
Spotify is still holding strong against all of there competition, but due to the fact it relies
mostly on just subscriptions and advertisements, revenue streams are able to compete with other
streaming services. Being that the company is still owned be it’s founders, it does not have the
advantages as a company with a parent company does. The continues problems that ale them

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through legal streams of music and contracts means that they need to accustom themselves to
legal rules in regards to digital streaming in both music and podcast. Thus Spotify needs to find
other different ways to increase there revenue.
RECOMMENDATIONS
Moving forward, the company needs to find new way to increase revenue and continue to
be different from other streaming services. As steaming continues to become bigger, so does the
need to find other way of revenue. They should aim to have a better connection between artist
and the artist manger in promotion and advertising. They should also have an alternate way of
access to there app by the end of the year.
Another revenue is to have live shows with the artist that they work with. Spotify should
look at the way the artist are doing and try to improve on it. Through events with select artist,
providing offers with different elements like better access to the favored artist, other artist
already have.
Another analysis report should be done toward the end of the year to research how other
streaming services have affected Spotify’s revenues. This could create in recommendations for
Spotify.

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REFERENCES
/@cmodi. (2018, January 07). Spotify 2.0 - Growing Beyond a Personal Music Streaming
Platform. Retrieved July 01, 2019, from https://medium.com/@cmodi/spotify-2-0-growing-
beyond-a-personal-music-streaming-platform-52abfbaa0d07
Dredge, S. (2019, February 6). Data. Retrieved June 09, 2019, from
https://musically.com/2019/02/06/spotify-financials-revenues-premium-subs/
Getty. (2018, April 03). History of Spotify: How the Swedish streaming company changed the
music industry. Retrieved June 09, 2019, from https://www.mirror.co.uk/tech/history-
spotify-how-swedish-streaming-12291542
Hwong, C. (2019, March 25). The Verto index: What are the most popular streaming music
services? Retrieved June 09, 2019, from https://www.vertoanalytics.com/verto-index-
streaming-music-services/
Iqbal, M. (2019, May 10). Spotify Usage and Revenue Statistics (2019). Retrieved June 09,
2019, from http://www.businessofapps.com/data/spotify-statistics/#1
Koch, R. (2017, January 17). The Secret to Spotify's Success. Retrieved June 09, 2019, from
https://www.entrepreneur.com/article/286778
Music Business Worldwide. (2019, May 06). The record industry is booming again – but the
digital services who rescued it deserve better. Retrieved June 09, 2019, from
https://www.musicbusinessworldwide.com/the-record-industry-is-booming-again-but-
the-digital-services-who-rescued-it-deserve-better/