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Spotify

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What's happening at Spotify? A brief look at the founding of the company, their current state, projected revenues, and future strategy.

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Spotify

  1. 1. James M. Reed / UGTTW Spring 15
  2. 2. Background • Founded in 2006 by Martin Lorentzon and Daniel Ek (current CEO) • Based in Stockholm, Sweden • Has raised more than $530m through Angel, VC, and institution funding • Series F completed in November 2014 • Notable investors include • The Coca – Cola Company • Goldman Sachs • Founders Fund • Sean Parker • Kleiner Perkins James M. Reed – January 2015
  3. 3. Internet & Music James M. Reed – January 2015
  4. 4. Recorded Music Industry Revenue James M. Reed – January 2015
  5. 5. Digital Music Sales James M. Reed – January 2015
  6. 6. Freemium Business Model James M. Reed – January 2015
  7. 7. Spotify User Base James M. Reed – January 2015
  8. 8. Payout James M. Reed – January 2015
  9. 9. Simplified Financial Statement Premium revenue / person / year $120.00 Non - premium revenue / person / year $15.00 Premium members 15,000,000.00 Non - premium members 60,000,000.00 Total revenue from premium members $1,800,000,000.00 Total revenue from non - premium members $900,000,000.00 Total yearly revenue $2,700,000,000.00 Payout $1,890,000,000.00 Retained $810,000,000.00 James M. Reed – January 2015
  10. 10. • Purchased in March of 2014 for $100m • Based in Somerville, MA • Dual focus • Meeting with Shane Tobin • Business development • Spent four years at The Echo Nest • Boston College ‘94 James M. Reed – January 2015
  11. 11. The Echo Nest • Recommendations • “Billions of data points” • The need to curate • Lean-forward • Lean-back • Platform building • First – wave failure • “Facebook Connect of Music” • APIs / SDKs James M. Reed – January 2015
  12. 12. Challengers James M. Reed – January 2015
  13. 13. Future James M. Reed – January 2015 • Improved advertising revenues • Successful lean – back listening • Artist relations • 3rd party development • Will they ever be profitable? • Leverage creation
  14. 14. Questions? James M. Reed – January 2015

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