Environmental Analysis for Spotify

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An Environmental Analysis for
Spotify USA
Sequoa Carter
Full Sail University
Project & Portfolio II: Business and Marketing
3/10/22

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The STEEPLE Analysis (Include Citations)
PROVIDE at least one observation for each of the seven elements of the STEEPLE analysis
(you can make more). These should be full paragraphs that include explanation and detail.
These observations should also help you to make statements that go in the SWOT chart, below.
Remember to put a “short form” citation in APA format after each observation here, and list the
corresponding APA “long form” reference in the Reference section at the end.
Keep the focus on the division/brand. You may observe something that affects the parent
company or the industry, and which will affect the division/brand, too. It’s okay to include those
observations, but always remember it’s the division/brand you’re working for. Not the parent.
SOCIOLOGICAL: Spotify’s subscribers are growing by the day, and it is because they know
exactly how to target millennials who make up most of their consumer demographics. According
to Hamilton (2020), “Given that this generation is native to advanced technology, you should be
able to determine their needs and do your best to exceed their expectations.” Spotify has done
just that with their personalized playlists, recommended nostalgia playlists, the ability to listen to
music anywhere anytime, the ability to bring back deleted playlists, and let you listen with your
friends in real-time. Spotify is tech-savvy, and they have technology that no other music
streaming company has. They understand that their consumers enjoy evolving technology
platforms, and they constantly deliver great technology through their advanced app features for
content creators and platform users.
TECHNOLOGICAL: Spotify is popular because of its ability to bring people together and know
what their listeners want. Spotify’s algorithm technology is why they have kept so many users
because they know what people want, how to make features feel personalized, and where to
place their advertisements. According to Werner (2020), “Spotify recommendations build on and
some of the re-occurring principles of the algorithms.” Meaning that Spotify uses its algorithm
technology to market products, market music, and develop new products and app features.
ECONOMIC: Spotify’s place in the music streaming market is undeniable. They are undoubtedly
toppling over their competitors, Apple Music, and Amazon Music. According to Porter (2022),
“Spotify was the largest music streaming service in the world as of the second quarter of 2021
with a market share of 31 percent, with Apple Music in second place at 15 percent, and Amazon
Music and Tencent Music each tied at third with 13 percent apiece.” Their lead in market shares
acknowledges their hard work and can be a chance to acquire new investors, companies, and
users. When investors see their success, they want to become a part of it, and when users
know that Spotify is in the lead, they want to know why.
ECOLOGICAL: Spotify is cautious in its role in making the climate better for everyone. They
understand that their company is big and has offices worldwide, so they are changing their ways
to reduce their carbon emissions. According to Spotify AB (2021), Spotify has now joined the
Exponential Roadmap and the UN Race to Zero. These are two companies dedicated to
removing carbon emissions from our climate. Their partnerships with these two companies

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show that they want to make a difference in the world and essentially save the planet. Through
their awareness, Spotify also shows they care about employees, content creators, and users.
Their awareness of climate change could allow Spotify to gain more platform users, investors,
and new partnerships.
POLITICAL: Recently with the war in Ukraine, Spotify has stood firm with its actions against
Russia’s violence. According to Bloom (2022), Spotify is providing support for employees in
Ukraine, and they are disabling premium accounts and closing offices in Russia. By doing this,
Spotify has shown they disagree with the leader of Russia and his political views. Spotify has
demonstrated that they do not condone violence and believe in more diverse and peaceful ways
of politicking.
LEGAL: Over the years, Spotify has had several lawsuits filed against them for copyright
infringement. One of the most memorable was from Wixen Music Publishing, which was settled
out of court. According to BBC News (2018), Spotify has failed to address the claims of
songwriters and publishers. This is a significant issue that can be a risk against Spotify’s
reputation finances for years to come if it is not addressed. Furthermore, Spotify refuses to
increase pay by 5% for songwriters (Stassen, 2021). If songwriters continue to feel underpaid,
there will be more negative media about Spotify, possibly discouraging artists and users to use
the platform.
ETHICAL: On Glassdoor, Spotify has a rate of 4.2 stars out of 5, which is good and says a lot
about the type of workplace Spotify is. Their Glassdoor rating proves why Spotify is so good at
what they do because of their teamwork. The Spotify Code of Conducts and Ethics (n.d.) states,
"We do not accept any sort of harassment, intimidation or rudeness, and this includes
comments, jokes, and questions that are insensitive/inappropriate." This part of the document is
the most important because it contributes to the functionality of employees at Spotify and the
ability to do their job. Spotify's code of ethics also explains why Spotify has not had many legal
issues with employees or any walkouts when the company goes through legal battles.

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The SWOT Analysis (Citations optional)
Provide at least three statements in each of the four sections of the SWOT chart: Strengths,
Weaknesses, Opportunities and Threats. Include explanations and details within the chart that
make your points clear. A phrase is not enough. Each point should be a short paragraph.
HELPFUL HARMFUL

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INTERNAL
STRENGTHS
1. Spotify has unique app features
that consumers enjoy and find
better than its competitors.
Spotify realizes that most of
their consumers are millennials
and create the most advanced
music streaming service for
them.
2. Spotify does exemplary
targeting advertisements to their
consumers using their algorithm
technology. They then use the
same algorithmic technology to
make song recommendations
and playlists recommendations.
3. Recently, Spotify has expanded
its platform in six more
countries alongside the eighty
countries they already had. This
shows that Spotify is diverse
and wants to help musicians
around the globe. Spotify can
bring different cultures together
while also generating money
from various sources. With
expanding in these markets,
Spotify will have the most
markets worldwide compared to
their competitors.
WEAKNESSES
1. Joe Rogan is a weakness for
Spotify because of his racial
slurs. Joe Rogan caused Spotify
to get bad press and caused
famous music artists Neil Young
to pull their music from Spotify.
Joe Rogan's actions have led to
Spotify losing more than two
billion dollars in market value
over three days.
2. Daniel Ek is also a weakness for
Spotify because he rudely
addresses sensitive topics.
Daniel Ek is good at his job;
however, most content creators
and subscribers do not like him.
If Daniel does not start
approaching sensitive topics
kindly, it could cost him more
lousy press and a decline in
subscribers and content
creators.
3. Spotify’s payout rates are the
lowest of most big music
streaming companies. Low
payout rates could harm Spotify
because it causes content
creators to protest the company
and much negative press. These
low payout rates are causing
independent artists and labels
to leave Spotify and turn to its
competitors. Low payouts could
cause Spotify revenue and
content creators and
subscribers to decline.

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EXTERNAL
OPPORTUNITIES
1. Expanding an app in Virtual
Reality Technology can help
Spotify generate more income
for their company and content
creators. It could also help them
remain the best music
streaming service amongst
competitors.
2. Social change in the LGBTQ+
rights movement can be good
for Spotify. It will give Spotify a
chance to recognize and
support these communities in
and out of the workplace. This
can help Spotify gain new
subscribers, content creators,
and employees from the
LGBTQ+ community.
3. Social change in terms of
technology can also be good for
Spotify because people
communicate more through
social media. Spotify can utilize
social media and features on
their mobile app to connect
users with similar users and
help connect artists with fans.
They can also use social media
and app features for marketing
their products.
THREATS
1. Spotify’s competitors have more
payouts per stream, better audio
quality, and better deals,
resulting in Spotify losing
subscribers and content
creators.
2. Spotify has lawsuits stacked
against them because of
copyright infringement towards
songwriters and music creators.
These lawsuits put their
company reputation at risk and
cost them money from court and
settlements.
3. The economy puts Spotify at
risk right now. Currently,
inflation is rising, which has
caused Spotify to increase
prices, which could cost them
subscribers. Also, the average
hourly earnings for employees
in America has decreased 0.8%
and could have Spotify
employees looking for new jobs
or affect their work
performance.

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Conclusions: (Include Citations)
Findings lead to Conclusions. In two or three well-developed paragraphs, provide conclusions
for the company based on your analysis of the findings. This means talking about the meaning
of your findings. For instance, is there growing negative feedback from customers based on
perceived changes to quality? Then it would be fair to say that the brand probably has a public
relations crisis looming in the near future.
Try to assess the fit of the current market position for your product. How does it compare to its
competitors and its industry as a whole? Where does it excel? Where can it improve? How does
the company’s financial health factor into what it can and can’t do?
With this exercise, you should begin to identify what questions your client hired you to answer.
Note what should be new goals and actions for the future. Note whether there should be any
changes to product/service line, target market or message. You will elaborate in Week 4 when
you make specific, future oriented and actionable recommendations for your company.
Spotify is a very socially conscious and technologically advanced music streaming
company. They are the best of the best. Spotify knows how and when to please its
consumers through its app features and its presence on social media (Germain, 2022).
They support the different cultures, genders, and sexualities within the world and do an
excellent job of making everyone feel included on their platform (Spotify AB, n.d.).
Spotify is not afraid to express its passion for helping the climate by contributing to and
joining two of the most prominent zero-emission organizations (Spotify AB, 2021).
Spotify uses its platform to constantly raises awareness about topics that matter in the
world, and more recently, that topic would be the war between Russia and Ukraine.
Spotify makes sure to stand against violence and makes sure its users understand they
do not condone war (Bloom, 2022). They make sure their content creators' voices are
heard.
However, negativity surrounds the founder and CEO of Spotify and his intentions for the
music industry and its creators. The negative image surrounding Daniel Ek could
potentially make all the good Spotify has been doing in the world go to waste and has
already had a destructive impact on their finances, in a loss of two billion dollars
(Spangler, 2022). Spotify has also received negative feedback regarding copyright
lawsuits and underpaid content creators (BBC News, 2018; Stassen, 2021). Although
Spotify is a wealthy company, its financial loss could be harmful during a time of rising
inflation and decreasing wages in the U.S because it puts Spotify’s investors,
employees, and content creators at risk (U.S. Bureau of Labor Statistics, 2022).
Nevertheless, Spotify is in good financial health with increasing users, subscribers, and
revenue and a 31% market share amongst its competitors (Spotify Technology S.A.,
2022; Porter, 2022). Spotify is the most likable music streaming app because of its
ability to appeal to millennials, their primary consumer demographic (Hamilton, 2020).
They are also one of the best companies to work for in 2022 because of their ratings on
Glassdoor and their moral code of ethics (Spotify Code of Conducts and Ethics, n.d.).
Spotify is a great company, and its future is looking bright, but there are always
improvements that can be made, one being its negative image in the media. One way to

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improve their image is by doing more hands-on work in their community that aligns with
their ethics, principles, and politics. Spotify would also benefit from diving into the world
of Virtual Reality by creating more jobs for employees, more revenue for the company,
more income for content creators, and bringing more subscribers to Spotify. Overall,
Spotify remains firm in its position amongst all music streaming services. Spotify is a
powerful company socially, technologically, economically, ecologically, and ethically,
regardless of its failures in legal battles. Their strengths and opportunities outweigh their
weaknesses and threats. Spotify is one of the best music streaming companies globally,
and they continue to make changes for the betterment of the people and music.
References:
In APA format, list each reference you used (at least five). Each reference in this section should
have a corresponding “short form” citation in the STEEPLE section or the Conclusions section.
BBC News. (2018, December 21). Spotify settles $1.6bn lawsuit over songwriters'
rights. BBC News. Retrieved March 13, 2022, from
https://www.bbc.com/news/business-46646918
Bloom, M. (2022, March 2). Spotify closes office in Russia and suspends premium
accounts in response to Ukraine invasion. Pitchfork. Retrieved March 13, 2022, from
https://pitchfork.com/news/spotify-closes-russian-office-indefinitely-in-response-to-
ukraine-invasion/
Germain, T. (2022, February 17). Best Music Streaming Services. Consumer Reports.
Retrieved March 9, 2022, from https://www.consumerreports.org/best-music-streaming-
service-for-you-a2126039193/
Glassdoor,Inc. (n.d.). Spotify employee reviews - glassdoor. Glassdoor. Retrieved
March 13, 2022, from https://www.glassdoor.com/Reviews/Spotify-Reviews-
E408251.htm
Irshad, S., & Perkis, A. (2020, October 26). Increasing user engagement in virtual
reality:the role of interactive digital narratives to trigger emotional responses:
Proceedings of the 11th Nordic Conference on human-computer interaction: Shaping
experiences, shaping society. ACM Other conferences. Retrieved March 9, 2022, from
https://dl.acm.org/doi/abs/10.1145/3419249.3421246
Jarvey, N. (2018, May 30). Daniel Ek admits Spotify anti-hate policy was "Rolled out
wrong". The Hollywood Reporter. Retrieved March 9, 2022, from
https://www.hollywoodreporter.com/business/digital/daniel-ek-admits-spotify-anti-hate-
policy-was-rolled-wrong-1116042/
Koombea, Inc. (2020, August 5). How to develop a great app for millennials. Koombea.
Retrieved March 13, 2022, from https://www.koombea.com/blog/how-to-develop-a-
great-app-for-millennials/

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Limbong, A. (2020, August 10). Comments from Spotify CEO anger some musicians.
NPR. Retrieved March 9, 2022, from
https://www.npr.org/2020/08/10/901064434/comments-from-spotify-ceo-anger-some-
musicians
Nield, D. (2021, March 16). 12 things you didn't know you could do in Spotify. Gizmodo.
Retrieved March 13, 2022, from https://gizmodo.com/12-things-you-didnt-know-you-
could-do-in-spotify-1846470945
Porter, J. (2022, January 20). Streaming music report sheds light on battle between
Spotify, Amazon, Apple, and google. The Verge. Retrieved March 13, 2022, from
https://www.theverge.com/2022/1/20/22892939/music-streaming-services-market-
share-q2-2021-spotify-apple-amazon-tencent-youtube
Spangler, T. (2022, January 29). Spotify lost more than $2 billion in market value after
Neil Young pulled his music over Joe Rogan's podcast. Variety. Retrieved March 13,
2022, from https://variety.com/2022/digital/news/spotify-2-billion-market-cap-neil-young-
joe-rogan-1235166798/
Spotify AB. (2021, November 17). Spotify expands to six more countries around the
world. Spotify. Retrieved March 13, 2022, from https://newsroom.spotify.com/2021-11-
17/spotify-expands-to-six-more-countries-around-the-world/
Spotify AB. (2021, September 28). Spotify's next step on our path to net zero emissions.
Spotify. Retrieved March 13, 2022, from https://newsroom.spotify.com/2021-09-
28/spotifys-next-step-on-our-path-to-net-zero-emissions/
Spotify AB. (n.d.). Diversity, inclusion & belonging. Life at Spotify. Retrieved March 13,
2022, from https://www.lifeatspotify.com/diversity-equity-impact/diversity-inclusion-
belonging
Spotify Code of Conducts and Ethics. (2018).Welcome to the Spotify Code of Conduct
and Ethics. This is how we roll. Spotify Technology S.A. http://q4live.s22.clientfiles.s3-
website-us-east-1.amazonaws.com/540910603/files/doc_downloads/govDocs/Code-of-
Conduct-FINAL-(2018)-GABS.pdf
Spotify Technology S.A. (2022, February 2). Spotify Technology S.A. Announces
Financial Results for Fourth Quarter 2021. Spotify Investors . Retrieved March 13, 2022,
from https://investors.spotify.com/financials/press-release-details/2022/Spotify-
Technology-S.A.-Announces-Financial-Results-for-Fourth-Quarter-2021/default.aspx
Stassen, M. (2021, October 14). Spotify and other streaming services propose 'lowest
royalty rates in history' for songwriters. Music Business Worldwide. Retrieved March 13,
2022, from https://www.musicbusinessworldwide.com/spotify-and-other-streaming-
services-propose-lowest-royalty-rates-in-history-for-songwriters/
U.S. Bureau of Labor Statistics. (2022, March 10). Home. U.S. Bureau of Labor
Statistics. Retrieved March 13, 2022, from https://www.bls.gov/

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Werner, A. (2020). Organizing music, organizing gender: algorithmic culture and Spotify
recommendations. Popular Communication, 18(1), 78–90. https://doi-
org.oclc.fullsail.edu/10.1080/15405702.2020.1715980
Wright, L. T. (2022, February 3). Why do so many musicians hate Spotify? Spinditty.
Retrieved March 13, 2022, from https://spinditty.com/industry/why-so-many-artists-hate-
spotify
Yonata, J. (2022, February 9). How much do Spotify & other music streaming platforms
pay per stream. Headphonesty. Retrieved March 9, 2022, from
https://www.headphonesty.com/2021/11/how-much-does-spotify-pay-per-stream/