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Spotify's Final Song: Why Spotify will Fail due to Pricing Strategy

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Spotify is an amazing service that 24 million people use and love. Yet, they're losing money even though they're bringing in hundreds of millions of dollars in revenue. This presentation explores how Spotify's pricing strategy is destroying the company by neglecting the money on the table left by premium customer personas.

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Spotify's Final Song: Why Spotify will Fail due to Pricing Strategy

  1. Pricing Strategy PriceIntelligently TM SPOTIFY’S FINAL SONG (WHY SPOTIFY IS DOOMED)
  2. Pricing Strategy PriceIntelligently TM Spotify has more than 24 million subscribers
  3. Pricing Strategy PriceIntelligently TM 6 million of which pay for the service
  4. Pricing Strategy PriceIntelligently TM in revenue in 2011 $236,000,000 They generated
  5. Pricing Strategy PriceIntelligently TM
  6. Pricing Strategy PriceIntelligently TM doing it $293,000,000 They spent
  7. Pricing Strategy PriceIntelligently TM $-57,000,000 Doing the math, Spotify lost in 2011
  8. Pricing Strategy PriceIntelligently TM What happened?
  9. Pricing Strategy PriceIntelligently TM
  10. Pricing Strategy PriceIntelligently TM Expensive licensing deals with the major labels
  11. Pricing Strategy PriceIntelligently TM They give 70¢ of every dollar to the major labels
  12. Pricing Strategy PriceIntelligently TM Which leaves Spotify with just 30¢
  13. Pricing Strategy PriceIntelligently TM
  14. Pricing Strategy PriceIntelligently TM It’s cheap.
  15. Pricing Strategy PriceIntelligently TM Most of the features are available for free.
  16. Pricing Strategy PriceIntelligently TM And it’s all you can eat for only $10 per month.
  17. Pricing Strategy PriceIntelligently TM That’s all the songs on the planet for only $10 per month
  18. Pricing Strategy PriceIntelligently TM So what can they do to survive?
  19. Pricing Strategy PriceIntelligently TM Renegotiate their contracts with rights holders…
  20. Pricing Strategy PriceIntelligently TM …Like that will ever happen
  21. Pricing Strategy PriceIntelligently TM Make heavy listeners pay more
  22. Pricing Strategy PriceIntelligently TM Most users are definitely centered on the current price point
  23. Pricing Strategy PriceIntelligently TM But, a good part of the market is willing pay more Less Sensitive and Willing to Pay More
  24. Pricing Strategy PriceIntelligently TM Audiophiles are willing to pay much, much more Premium Persona #1 Premium Persona #2
  25. Pricing Strategy PriceIntelligently TM If they don’t figure it out, Google Play, iRadio, and royalty costs…
  26. Pricing Strategy PriceIntelligently TM Will play Spotify’s swan song
  27. Pricing Strategy PriceIntelligently TM Download our free e-book to stop guessing, and start pricing intelligently.
  28. Pricing Strategy PriceIntelligently TM Download our free e-book to stop guessing, and start pricing intelligently.

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