In this project, I had to research a company, its background, its products, its market, and learn how to use varied research sources. The company I chose to research was Spotify Technology S.A.

1. ASSIGNMENT 1 - INITIAL COMPANY RESEARCH
Student Name: Stefanie Ideker
Date: 02/09/2020
COMPANY:
Parent Company (or Holding Company) Name: Not applicable
Brand/Division/Subsidiary Name: Spotify Technology S.A.
In 2006, Spotify was founded in Stockholm, Sweden, by Daniel Ek and Martin Lorentzon
(Olson, 2018). Spotify started as a small start-up and was developed as a response to the
growing piracy problem the music industry was facing (BBC, 2018). Two years later, in 2008,
Spotify was launched. Initially, the company limited the sign-up for free by making it invite-only,
and right after, paid-for subscriptions were made available (Parsons, 2018).
Daniel Ek is not only the co-founder but also the CEO and Chairman of Spotify’s board of
directors. As the CEO, Daniel Ek is responsible for guiding the vision and strategy of the
company and leading the management team (News Bites - People in Business, 2019). Currently,
according to Spotify (2019), “Spotify is the most popular global audio streaming subscription
service with 271m users, including 124m subscribers, across 79 markets”.
 Year over Year, 2 yr. span: After several ups and downs, the stock price is going up.
o Stock price on April 3, 2018: 149.01 (close)
o Stock price on February 7, 2020: 154.55 (close)
(Spotify Technology S.A. (SPOT) Stock Historical Prices & Data, 2020)
 Compare stock performance to a market index: In comparison to Apple – not only Apple
Music but the entire company – Spotify is way under Apple’s average rate of growth in the
last 2 years. Comparing Spotify to the DOW Jones industrial average in the last 2 years,
Spotify is also under the average rate of growth to other businesses at 4.48% versus the
DOW Jones industrial average of 21.60%. (SPOT Interactive Stock Chart: Spotify Technology
S.A. Stock - Yahoo Finance, 2020)
 Net Income: -€78,000,000 since December 31, 2018 (Spotify Technology S.A. (SPOT) Income
Statement, 2018)
 Net Profit Margin: -1.48% (Spotify Technology S.A. (SPOT) Income Statement, 2018)
 Debt to Assets Ratio: 0.51 (Spotify Technology S.A. (SPOT) Balance Sheet, 2018)

2. BUSINESS LINES OF BRAND OR DIVISION
Product/Service line A: Premium Individual
Example of Product/Service line A: It is a monthly subscription plan for one person. This plan
costs $9.99/month in the United States and includes unlimited high-quality streaming access to
over 50 million songs, playing music without an internet connection, traveling abroad with no
limitations, no ad interruption, and unlimited skips (Premium, n.d.)
Product/Service line B: Premium Student
Example of Product/Service line B: It is a monthly subscription plan for one person who is
currently enrolled at an accredited college or university. This plan costs half the price,
$4.99/month in the United States, and besides all the features mentioned in the Premium
Individual plan, the Premium Student also offers access to Hulu's ad-supported plan and
SHOWTIME for no extra cost. (Premium Student, n.d.)
Product/Service line C: Premium Family
Example of Product/Service C: It is a monthly subscription plan for up to 6 people where each
member has its own individual Premium account. This plan costs $14.99/month in the United
States, and besides all the features mentioned in the Premium Individual plan, it also offers a
playlist based on the tastes of everyone on the plan. (Premium Family, n.d.)

3. TARGET MARKET FOR BRAND OR DIVISION
Example of Product/Service line A: Premium Individual
 Geographic: Europe, North America, and Latin America (Business Wire, 2020)
 Demographic: Men and Women, 25-34 years old (Hwong, 2018)
 Psychographic: People who spend time listening to music on multi-platforms and are
constantly using social media. (Hitwise, 2017)
 Benefits Sought by consumer: A personalized music experience and access to millions of
songs with no ads.
 Usage Rate of consumer: Heavy
Example of Product/Service line B: Premium Student
 Geographic: Europe, North America, and Latin America (Business Wire, 2020)
 Demographic: Men and Women, 18-24 years old, college student, single (Hwong, 2018)
 Psychographic: Students with low or no income who spend time listening to music on multi-
platforms. They also follow trends and are constantly using social media. (Hitwise, 2017)
 Benefits Sought by consumer: A personalized music experience and access to millions of
songs with no ads.
 Usage Rate of consumer: Heavy
Example of Product/Service line C: Premium Family
 Geographic: Europe, North America, and Latin America (Business Wire, 2020)
 Demographic: Men and Women, 35-44 years old, married with kids (Hwong, 2018)
 Psychographic: Moms and dads who like listening to music with the family. They usually
listen to music in the car, and in the early mornings before going to work.
 Benefits Sought by consumer: Listening to millions of songs in one single platform with no
ads.
 Usage Rate of consumer: Medium

4. DIRECT COMPETITION FOR YOUR BRAND OR DIVISION
Name of Competitor Company 1: Apple (Apple Music)
Competitor Company 1 Product/Service: Monthly Individual
Competes with your Product/Service A: Premium Individual
Name of Competitor Company 2: Pandora
Competitor Company 2 Product/Service: Pandora Premium Student
Competes with your Product/Service B: Premium Student
Name of Competitor Company 3: Amazon (Amazon Music)
Competitor Company 3 Product/Service: Family Plan
Competes with your Product/Service C: Premium Family
Ranking:
Company #1: Spotify 124 million subscribers worldwide (Spotify, 2019)
Company #2: Apple Music 60 million subscribers worldwide (Tillman, 2019)
Company #3: Amazon Music 55 million subscribers worldwide (Watson, 2019)
Company #4: Pandora 7 million subscribers worldwide (Welch, 2020)

5. FINDINGS:
Spotify was developed to minimize the piracy problem the music industry was facing at
the beginning of the last decade, and nowadays, Spotify is the largest driver of revenue to the
music business (Spotify, 2019). Despite that, the financial information found in this assignment
doesn’t represent Spotify’s financial situation very well. In 2008, Spotify recorded a net loss of
€78 million, and it may look something terrible, but that loss was actually an improvement
compared to the previous years (Johnston, 2020); in 2017, Spotify’s net loss amounted to 1,235
million euros (Watson, 2019). To make a better assumption that the company is doing well, an
analysis of its progress over the years has to be done; only considering the most recent year to
evaluate the company’s financial position may not be the ideal method.
Spotify revolutionized the music industry and it’s currently the music streaming service
with the most subscribers: 124 million subscribers worldwide. Although the music streaming
service industry has become a red ocean market, Spotify can still set itself apart among its
biggest competitors: Apple Music, Pandora, and Amazon Music. Spotify was one of the first
music streaming services to be released, and this is an advantage because, when users create
their own playlists in a platform, they don’t want to have the job of creating all of them again in
another platform, which reduces the chances of users starting to use another music streaming
service. Another good reason to use Spotify instead of other services is that, unlike Apple
Music, Spotify offers a free, ad-supported version of its service; the users can experience the
platform for free and then decide if they want to pay for it or not (Elliott, 2018).

6. REFERENCES:
BBC. (2018, March 1). How Spotify came to be worth billions. Retrieved from
https://www.bbc.com/news/newsbeat-43240886
Business Wire. (2020, February 5). Spotify Technology S.A. Announces Financial Results for
Fourth Quarter 2019. Retrieved from
https://www.businesswire.com/news/home/20200205005323/en/Spotify-Technology-
S.A.-Announces-Financial-Results-Fourth
Elliott, M. (2018, November 9). 5 good reasons to pay for Spotify. Retrieved from
https://www.cnet.com/how-to/good-reasons-to-pay-for-spotify/
Hitwise. (2017, May 15). Music streaming services and their audiences. Retrieved from
https://www.hitwise.com/en/articles/streaming-music-audiences/
Hwong, C. (2018, March 22). The Verto index: What are the most popular streaming music
services? Retrieved from https://vertoanalytics.com/verto-index-streaming-music-
services/
Johnston, M. (2020, February 3). How Spotify Makes Money: ad-free music-streaming
subscriptions. Retrieved from
https://www.investopedia.com/articles/investing/120314/spotify-makes-internet-
music-make-money.asp
News Bites - People in Business (November 28, 2019). Daniel Ek of Spotify technology in third
quartile of Large MCap CEO Scorecard for past quarter. Retrieved from https://advance-
lexis-com.oclc.fullsail.edu/api/document?collection=news&id=urn:contentItem:5XM1-
VKJ1-DXKH-N126-00000-00&context=1516831
Olson, P. (2018). Google, Amazon are why Spotify needs its own speaker. Retrieved from
http://search.ebscohost.com.oclc.fullsail.edu:81/login.aspx?direct=true&db=bth&AN=1
28339847&site=ehost-live
Parsons, J. (2018, April 3). History of Spotify: how the Swedish streaming company changed the
music industry. Retrieved from https://www.mirror.co.uk/tech/history-spotify-how-
swedish-streaming-12291542
Premium. (n.d.). Retrieved February 9, 2020, from
https://support.spotify.com/us/article/spotify-premium/
Premium Family. (n.d.). Retrieved February 9, 2020, from
https://support.spotify.com/us/article/premium-family/

7. Premium Student. (n.d.). Retrieved February 9, 2020, from
https://support.spotify.com/us/article/student-discount/
SPOT Interactive Stock Chart: Spotify Technology S.A. Stock - Yahoo Finance. (2020, February 3).
Retrieved from https://yhoo.it/2SeC7Hw
Spotify. (2019, December 31). Company Info. Retrieved February 8, 2020, from
https://newsroom.spotify.com/company-info/
Spotify Technology S.A. (SPOT) Balance Sheet. (2018). Retrieved from
https://finance.yahoo.com/quote/SPOT/balance-sheet?p=SPOT
Spotify Technology S.A. (SPOT) Income Statement. (2018). Retrieved from
https://finance.yahoo.com/quote/SPOT/financials?p=SPOT
Spotify Technology S.A. (SPOT) Stock Historical Prices & Data. (2020). Retrieved from
https://finance.yahoo.com/quote/SPOT/history?period1=1423440000&period2=158120
6400&interval=1d&filter=history&frequency=1d
Tillman, M. (2019, June 28). The number of Apple Music subscribers compared to Spotify.
Retrieved from https://www.pocket-lint.com/apps/news/148494-does-apple-music-or-
spotify-have-more-subscribers-hint-it-isn-t-even-close
Watson, A. (2019, December 11). Number of Pandora's paying subscribers 2018. Retrieved from
https://www.statista.com/statistics/253850/number-of-pandoras-paying-subscribers/
Watson, A. (2019, September 24). Spotify revenue/net income 2018. Retrieved from
https://www.statista.com/statistics/244990/spotifys-revenue-and-net-income/
Welch, C. (2020, January 22). Amazon Music passes 55 million customers as it chips away at
Spotify and Apple Music. Retrieved from
https://www.theverge.com/2020/1/22/21077187/amazon-music-service-55-million-
customers-spotify-apple-music-prime-members