1.
Spotify
S T R A T E G Y T O R E M A I N T H E
L E A D E R I N T H E M U S I C I N D U S T R Y

2.
Market definiton
Digital music streaming services, e.g. Spotify, Deezer or Apple Music, offer unlimited
access to their content libraries either for a monthly subscription-fee (without any
advertising) or ad-supported, with forced commercial breaks between the tracks. Music
can be streamed to various connected devices. Internet radio or video streams (e.g.
YouTube) are not included.
Music streaming in 2016
Revenue mUSD 1,931.3
User penetration 53.70% in 2016
expected 62.38% in 2020.
Revenue mUSD 351.4
User penetration 20.40% in 2016
expected 27.32% in 2020.
Revenue mUSD 309.7
User penetration 44.15% in
2016 expected 55.05% in 2020.
Revenue mUSD 229.0
User penetration 26.53% in
2016 expected 33.95% in 2020.
Revenue mUSD 141.9
User penetration 19.79% in
2016 expected 26.71% in 2020.

3.
Amazon Prime music
Launch in December 8, 2015.
More than a million songs.
54 million subscribers worldwide.
Audio: 256 kbit/s VBR .
Ad-free music streaming with a $99 annual Amazon Prime subscription.
Limits international access by checking users' credit card issued country.
Music service available to Sonos customers (US, UK, France, Germany).
Freemium streaming business model.
Market share in the US - 7%.
Platforms - Windows, OS X, iOS, Android, FireOS.

4.
Amazon Prime music
Possibility to save high-quality Prime
tracks to the device for offline
listening.
Playlists for specific moods and
activities.
Recommendations based on the music
already played.
Ad-free prime stations.
Account sharing: One device at a time
can actively stream music, while up to
four can play previously downloaded
music offline. Up to 10 devices can be
signed in to the same account.
Features

5.
Apple music
Launched in June 30, 2015 in over 100 countries worldwide.
More than 30 million songs.
17 million subscribed users worldwide.
Owner: Apple Inc.
Audio: 256Kbps in AAC.
3 months free trial before becoming “paid only”. $9.99 / single license; $14.99 / family
license; $4.99 / student license.
Subscription business model.
Market share in the US - 15%.
Platforms - Apple’s mobile devices and watch, as well as Android devices. Mac and
Windows desktop applications are also available.

6.
Apple music
Strong curation, Apple Connect social network, Beats 1 Radio and genre-
based stations
Account sharing: The service can be used by only one device at a time for
both the free and paid versions. Family plans, however, allow for up to six
people to stream music.
Offline playback: Paying subscribers can stream music when their
devices are not connected to data or Wi-Fi networks.
The iOS application is integrated with Siri voice commands.
High-profile advertising.
Vendor lock-in through network effects and DRM encumbered
downloads, occasionally deleting original music from a user’s hard drive
and replacing it with DRM encumbered versions.
Apple has the highest conversion rate from “free” to “premium” in Japan.
Features

7.
Deezer
Launched in France in 2007. Became available in the US
in July 2016.
40 million songs that reach more than 180 countries.
16 million users worldwide, with 6 million subscribed.
Founder: Daniel Marhely Key people: Jonathan
Benassaya (Co-Founder), Hans-Holger Albrecht (CEO),
Simon Baldeyrou (CFO).
Audio: 20kbps MP3, 1411kbps FLAC
£9.99 a month, £14.99 a month Elite, Free ad-funded
service.
Strong curation, Facebook integration, optional apps,
recommendations based on listening habits, mixes.
Ad-free service only for premium users, free streaming
business model (freemium).
Unlimited ad-supported free access to on-demand
music.
Platforms: Android, iOS, BlackBerry, web player.

8.
Google Play music
Launched in November 16, 2011.
More than 30 million songs.
Audio: 320kbps MP3.
Basic service, which lets users upload up to 50 000
songs to personal cloud libraries, is free.
30-day free trial of "All Access”. A subscription plan,
which lets users stream most commercially available
songs, is available for $9.99 a month, includes access
to YouTube’s subscription service, YouTube Red, which
eliminates ads on that platform. US$14.99/month for
"All Access" for up to 6 family members.
Freemium business model.
Market share in the US - 8%.
Platforms - Apple and Android apps, plus web
browsers.

9.
Google Play music
Unlimited subscribers have access to on-demand music, while users of
the free service are able to customize radio stations.
Account sharing: With Unlimited Google Play, users can authorize up
to 10 devices, but can stream only on one device at a time.
Offline playback: Available only with an Unlimited subscription.
Features

10.
Spotify
Launched in September 2008 by Swedish
startup.
More than 30 million songs.
100 million users, 30 million subscribers.
Founders – Daniel Ek, Martin
Lorentzon.
Audio: 320kbps OGG
Free version comes with ads. Ad-free
Spotify Premium costs $10 a month,
family and student discounts available.
Freemium business model.
7 types of ads: Audio Ads, Display Ads,
Billboard Ads, Homepage Takeovers,
Branded Playlists, Lightbox and
Advertiser Pages. Ads vary in size, type
and user engagement.
Market share in the US ­ 13%.
Platforms ­ Apple and Windows mobile and
desktop computer applications;Android
phones; PlayStation; Roku, a streaming device
for televisions; and web browsers.

11.
Spotify
Moderate curation, Facebook integration, optional apps, recommendations
based on listening habits, genre and artist-led radio stations, Discover
Weekly playlists 'On Tour' feature, which means you'll know if an artist
you've searched for is playing a concert in your country any time soon.
Account sharing: Music can be played on only one device at a time, with up
to three devices signed in to the service at any time.
Offline playback: Only for Premium users.
Features

12.
Tidal
Launched October 28, 2014
More than 30 million songs and 75,000
videos.
3 million subscribers.
Developer – Project Panther Ltd. (Jay
Z)
Audio: 1411kbps, 16-bit/44.1 kHz FLAC
and ALAC music streams
$9.99 a month for Tidal Premium or
$19.99 for Tidal HiFi, which offers
higher-quality sound. Both versions
are ad-free.
Subscription business model.
Market share in the US - 5%.
Platforms - Apple and Android apps,
a PC app and web browsers.

13.
Tidal
All subscribers get music and videos on
demand. In addition, they get access to
Tidal X, a program that gives artists a
platform to connect with their fans
through special events, including
concerts.
Exclusive content from artists, rewards
features, ”Tidal rising” for unknown
singers.
Account sharing: One device can stream
music while connected to cellular data or
Wi-Fi, and three devices can play music in
offline mode at one time.
Offline playback: Both subscription levels
allow users to listen while their device is
offline.
Features

14.
Main strengths
Apple - Hardware
Google - Advertising
Spotify - Data

15.
Strategy for Spotify
The need to increase the number of subscribers in order to get
more revenue without decreasing the royalty fees to the labels
and artists.
Obtaining streaming rights to a large library is a key factor in
the success of a streaming service.
Become more sustainable (more emphasis on data and
information).
Goals

16.
Strategy for Spotify
Offering limited free trial periods as an incentive for consumers to make
the switch (Apple example), leaving the subscription price low.
Partnering (Sonos example, Soundcloud – to expand the music library)
Limit free streaming to an introductory offer, incentivizing paid
subscriptions through exclusive offerings (Tidal example).
Organise a channel for artists to communicate with fans, transform
Spotify into an artist marketing platform.
Windowing.
Organize crowdfunding for improving the services, thus saving resources.
Enter the market of audiobooks and podcasts to raise income.
Initiate a PR campaign for market correction to properly value music
consumption as Spotify has problems with artists not willing to cooperate
because of its business model.
Solutions

17.
Thank you
for the attention