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 IS DOOMED)

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Spotify has more than 24 million
subscribers

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6 million of which pay for the
service

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in revenue in 2011
$236,000,000
They generated

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doing it
$293,000,000
They spent

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$-57,000,000
Doing the math, Spotify lost
in 2011

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What happened?

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Expensive licensing deals with the
major labels

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They give 70¢ of every
dollar to the major labels

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Which leaves Spotify with
just 30¢

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It’s cheap.

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Most of the features are available
for free.

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And it’s all you can eat for only
$10 per month.

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That’s all the songs on the planet
for only $10 per month

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So what can they do to survive?

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Renegotiate their contracts with
rights holders…

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…Like that will ever happen

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Make heavy listeners pay more

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Most users are definitely centered
on the current price point

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But, a good part of the market is
willing pay more
Less Sensitive and Willing to Pay More

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Audiophiles are willing to pay much,
much more
Premium
Persona #1
Premium
Persona #2

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If they don’t figure it out, Google
Play, iRadio, and royalty costs…

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Will play Spotify’s swan song

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Download our free e-book to stop
guessing, and start pricing intelligently.

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Download our free e-book to stop
guessing, and start pricing intelligently.