The document is a comprehensive analysis of the competitive dynamics between Spotify and Apple Music in the music streaming industry, detailing their business models, market positions, and strategic choices. It contrasts Spotify’s freemium model, which relies on both free and premium subscriptions, with Apple Music's paid-only subscription approach, emphasizing the implications for user acquisition and artist engagement. Furthermore, it examines external industry factors such as supplier power and the threat of new entrants, highlighting how these elements shape the strategies of both companies.

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Spotify & Apple Music
a strategic fight for the music streaming industry
Student Name: Federico Catellani
Word Count: 10994

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SUMMARY
 Identity card of the two companies
o page 3
 Different business models
o page 3
 Industry based analysis
o Page 7
 Resource based analysis
o Page 15
 Institutional based analysis
o Page 23
 Knowledge based analysis
o Page 28
 The strategic fight
o Page 31
 Suggestions
o Page 36
 Reference list
o Page 38

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1) IDENTITY CARDS OF THE 2 COMPANIES
Name Spotify Apple Music
Headquarters Stockholm, Sweden Cupertino, USA
Industry Media streaming Media streaming
Year of launch 2008 2015
Country of origin Sweden United States of America
Type of business entity Private, owned by Spotify AB Public, owned by Apple Inc.
Spotify and Apple Music are respectively the market leader and the main follower in the music
streaming industry. Since Spotify made its appearance on the market, together with other few
players, it completely turned upside-down the logics of the music industry in the time range of less
than a decade. Nowadays, one of the main revenues for this industry comes from streaming
platforms and less and less from physical and digital sales of artists’ albums and songs. Only 2
years ago Apple Inc. made its appearance in the music streaming industry with its Apple Music
business unit. To understand the strategies of the two companies it is necessary, first, to know what
their main activity, music streaming, consists of. Briefly, it is a service that allows final users to
listen, for free or by paying a fee, audio material through internet access. What these companies do
is providing platforms that make music and contents easily and legally accessible for their base of
customers.
2) DIFFERENT BUSINESS MODELS
Spotify and Apple Music rely on two different business models and have connections with at least 3
different main actors: record labels, customers and third parties. We’ll start by analysing Spotify
model proceeding step by step:

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- Customers subscribe to Spotify service
- They create a new account or connect their social media profile
- Customers can choose between a free or a premium subscription customers
- Customers download Spotify’s app or use their online web streaming service
- They listen to music on Spotify’s platform for free or paying a monthly fee
- Music is provided to Spotify by record labels and individual artists record
- Spotify pays royalties to use their music labels
- Spotify sells advertisement during the music streaming to 3rd parties 3rd
- These 3rd parties pay for their promotion spaces parties
We can summarize these steps through the following chart:
Pay advertisement
spaces to
Sells advertisement
spaces
Pay premium
subscriptions to
Give
music to
Pays
royalties to
Record labels and
independent artists
Spotify
3rd parties
Premium customers Free users
Gives
music to

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The sources of revenues of the company are indicated in the chart with green arrows, while the red
arrows represent the main expenses. The relationship between Spotify and customers is particularly
important because at the base of the Swedish company business model. Later on in the paper, we’ll
focus on the relationships with the other actors. As we previously said, customers can choose
between a free or a premium subscription: “they get basic features at no cost and can access richer
functionalities for a subscription fee” (Kumar, 2014). The richer functionalities offered by Spotify
consist of: music without advertisements from 3rd parties, the possibility to download music and
listen to it even without internet access, a higher audio quality, the possibility to choose which track
to play on smartphone devices, an unlimited number of skips for tracks. Basic functionalities given
for free comprehend listening to music with ads on all devices. On smartphones the app doesn’t
allow the user to choose which track to reproduce. Random tracks from the artist’s albums or from
the playlist chosen are played automatically by Spotify.
This kind of business model is called “freemium”, a combination between “free” and “premium”
and it demonstrates very useful to gain a large user base without spending a lot in advertising and
sales agents. Anderson argues that “industry data indicate that 98 per cent of Google’s Play Store
revenue and 95 per cent of Apple’s App Store revenue come from freemium applications, making
freemium a robust business model of the digital age” (as cited by Holm and Günzel-Jensen, 2017)
Now it’s the turn to look at Apple Music business model, always analysing it step by step:
- Customers download iTunes app and access through their Apple ID
- In case they don’t own Apple products yet, they create an Apple ID
- Customers start with a free three-months trial of Apple Music customers
- Customers synchronize their music library with the iTunes one
- Customers listen to music on Apple Music
- After 3 months they start to pay a monthly fee

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- Music is provided to Apple Music by record labels and individual artists artists
- Apple Music pays royalties to use their music
We can summarize these steps through the following chart:
pay subscriptions to give music to
The sources of revenue for the company come no more from 3rd parties but they are all fruit of the
paid subscriptions of Apple Music users. The company management refused to adopt a freemium
strategy as a sign of respect for the work of the artists, which considers to be undervalued if given
for free to users. “Freemium companies are building an audience on the back of the artist” said
Apple Music CEO in a speech to the audience at a Vanity Fair event in San Francisco (Statt, The
Verge, 2015).
Here we already start to figure out one of the essential differences between the two companies in
their business model characteristics. Apple Music supports a paid subscription-only business model
while Spotify has a freemium one. “The freemium business model involves providing a basic
version of a product or service for free, with the intention of persuading sufficient numbers of
customers to pay for a more advanced version” ( Holm and Günzel-Jensen, 2017). The creation of
value for the customers is the key to understand the modus operandi of Spotify and Apple Music,
because both have the same goal: reaching customer leadership. The content created for the users
must be immediately appealing right from the first time is presented to them. “Digital products and
services must not only be efficient to use and easy to learn, but also provide a rich user experience”
(Nylén and Holmström, 2015). Both companies use their technological recommender systems to
Pays royalties toGive music to
Apple MusicCustomers Record labels and
independent artists

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provide users with new suggestions that match their preferences. In fact, providing more
personalized service for customers, increase trust and customer loyalty, increase sales, and provide
opportunities to gain more knowledge of their customers (Kim et al., 2017). In this way, the first
impression will make them come back again on the platforms, and if this coming back gets
persistent it eventually will turn them into loyal customers. Preferably premium ones.
One disadvantage of freemium models is that they require a fast-growing user base to be
sustainable. Spotify, to achieve this goal after his launch, used corporate accelerators, which are
“company-supported programs of limited duration that support cohorts of start-ups during the new
venture process via mentoring, education, and company-specific resources” (Kohler, 2016).
Apple Music and its paid subscription only business risks to stop its growth under the captivating
free offer of Spotify, but on the other hand, doesn’t have to sustain the costs to maintain a large free
user base.
3) INDUSTRY BASED VIEWANALYSIS
Five Forces Analysis
At the beginning of this essay I said that Spotify and other players turned upside-down the logics of
the music industry, I will be more specific. Talking about recent history, music industry reached its
highest peak in the year 1999 with over $40 billion total sales (Cakebread, Business Insider UK,
2017). After that golden moment its revenues kept on declining, due to piracy and physical CDs’
popularity collapse. Only in 2012 we witnessed to the first revenue growth since 1999 “thanks to
the rapid expansion of digital download and subscription services” (Cookson, Financial Times,
2013), such as Apple iTunes and Spotify. Today, music industry is recovering with only $15.7
billion realized in 2016 and music streaming has become the major source of revenues for this
industry in many markets, such as “in the US where streaming accounts for 62% of total revenues”

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(Cakebread, Business Insider UK, 2017). Anyway, in Germany and Japan, other big music markets,
physical sales of CDs and records still accounts for 70% of the revenues (Ellis-Petersen, The
Guardian, 2017), but the situation is likely to change.
 Industry rivalry
Premium subscribers
(in million)
Spotify 60
Apple Music 30
Amazon Music Unlimited 16
Deezer 9
Google Play Music 5
Tidal 3
Pandora 4.86
(source Reuters, 2017)
As we can deduct from the charts, Spotify is currently the leader of music streaming industry with
around 60 million premium subscribers. Apple Music is the closest follower with 30 million. It’s
also interesting to notice that Apple Music only entered this business 2 years ago and already
positioned itself on the second step of the podium. The Californian streaming service took 2 years
to collect the same amount of paying subscribers that took Spotify 9 years to collect. We can
Spotify
47%
Apple Music
23%
Amazon Music
Unlimited
13%
Deezer
7%
Google Play
Music
4%
Tidal
2%
Pandora
4%
Premium subscribers (%)
in the music streaming industry

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visually see better this “assault” on the following chart that describes the market shares of Apple
Music increasing at a high rate year after year.
What we can also see from the chart is that the
overall music streaming industry is showing a
slower growth compared to past years, but the data
stops at September 2017, so we can’t make sure
assumptions yet.
The music streaming industry is populated by few
big players, but it currently feels like a duopoly
thanks to the large size of the 2 bigger competitors.
(source The Economist, 2017)
More important, their product offering is almost identical (platforms to reproduce music tracks).
This force doesn’t affect the profitability of Spotify, and neither the one of Apple Music, which
seem to stand each other. As we we’ll see in the strategy section, the battle between them is played
on the differentiation of their offer. Identical products and the easiness for customers to switch from
one service to the other are not enough to influence the duopoly. So, it wouldn’t be currently
favourable for both players to consider starting a price competition.
 Bargaining power of suppliers
Suppliers can be divided into two categories:
- the big record labels
- the independent artists and the small record labels.

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Universal, Sony and Warner are called respectively “the big three” of the music industry since they
possess the largest market shares. We can’t anyway exclude the fourth player constituted by a great
amount of independent record labels, that taken collectively account for a big slice of the cake.
Let’s have a look at the numbers (source
Midia report, 2016). We can see that “the big
three” together have around 70% of the total
market share of music industry. This gigantic
companies are the result of large mergers and
acquisitions carried out all along the last 20
years. In 1998 we would have talked about
“big five”, in 2004 about “big four”. Today
we have an even smaller number of big
suppliers and a galaxy of small independents. The market is controlled by these 3 record labels that
together supply the major quantity of music recorded. For this reason, they have a big bargaining
power. Nonetheless, it is thanks to Spotify and other music streaming services that the music
industry took a breath of fresh air and now risks no more to drown. The constant diminishing
returns coming from album sales since year 2000 forced big labels to disappear or to merge to
resist. One data is significant to frame this crisis: the drop of the 91% revenues coming from CDs
since 2000 to 2016 in the United states music market, the biggest music industry market (RIAA US
sales database, 2016). Right in the US digital streaming services have become the biggest source of
revenues. From that we can conclude that Spotify and Apple Music have some cards to play against
this music suppliers’ oligopoly.
Apple was the first one to throw a rope to the labels, saving them from hard times by creating
iTunes in 2001, a platform to sell mp3 audio tracks online to fight the decline of sales of physical
albums. The company entered the music market way before Spotify, and already collaborated with
22.40%
28.90%
17.40%
31.30%
Market shares (%) of record labels
Sony Music Universal Music Group
Warner Music Independents

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both big record labels and independent ones. Besides the existing network of relationship between
the company and the suppliers, Apple Music has in its hands the revenues of the labels coming from
the sales on iTunes, which gives it more leverage than the rival Spotify in contracting royalty
payments with them.
On the opposite side, in 2016 Spotify’s loss made from royalties’ payments and distribution costs
amounted at more than €5 billion. As a private company aspiring to obtain a successful public
listing at the end of 2017, Spotify needed more than ever to secure its deals with the big music
suppliers. Eventually it managed to get a renewal on trust, after though negotiations with the labels.
“The company has been able to trim back its payments to the record labels as long as it meets
growth targets” (Nicolaou, Financial Times, 2017). The power of suppliers is the force that
threatens more the Swedish company, but up to now it has been able to manage it, even if with big
losses.
Spotify and Apple can’t do without “the big three” suppliers. Renouncing at even one of them
would mean to fail in giving a full supply to the customers. Customers wouldn’t accept a half-
availability of tracks or artists on these platforms and would rapidly switch to other competitors. On
this side we see the real power of this oligopoly: no substitutes plus uniqueness of the product
supplied, which is the uniqueness of the artist signed by one label. On the other hand, it is not likely
that big labels, and even more small ones, would be willing and able to vertically integrate forward
implementing services of music streaming. They know very well that consumers would not like to
hear just their artists’ music, but also other labels’ artists. Of course, these other labels would prefer
to damage the competitor by denying it the right to stream their music or by fixing very high
royalties that would soon lead the entrant to bankrupt.

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 Threat of new entrants.
Spotify and Apple Music have some economies of scales in their activity of music streaming,
even though these are not immediately recognizable. The two services must pay licensing fees
to record labels per artist and per month on the base of the total number of times a song gets
played on the platforms, and for sure this doesn’t favour economies of scales. Though, when we
look at areas like sales and marketing or product development we see that the two companies,
thanks to their size, already have a solid experiential learning curve (Sisario, New York Times,
2017). In every country Spotify and Apple Music need to provide customers with a different
offering, both in terms of music and promotion of the service, without counting translations and
people on the place. Mr. Iovine, CEO of Apple Music, explained very well in an interview that
going into new countries means localizing everything, and that of course it results in
extraordinary expenses (Bradshaw, Financial Times, 2017). Another point that Mr. Iovine
makes is about the small margins of revenues for the companies operating in the music
streaming industry: very high capital requirements are needed to enter it. A point decisively in
favour of the companies already in the game since it increases the barriers to entry and
consequently decreases the attractiveness of this industry.
From the demand perspective we can see that buyers enjoy being part of “a network with a
larger number of fellow customers” as Michael Porter told us in his article on the five
competitive forces (Porter, 2008). This is caused by the social dimension of the platforms that
allows users to see which music tracks other users are listening to, and to interact, by giving
advices or just sharing their favourite music with them. So, the more users on the platform, the
more value creation, the more new users are attracted. It would be difficult for new entrants to
reach in short time such big networks without already being an internationalized company.
Anyway, since the low cost of the premium subscription, which for both services is fixed at
€9.99 with discounts for students and for family subscriptions, it wouldn’t be difficult nor costly

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for users to switch to a new entrant music streaming service. They would only need an access to
internet and small amounts of money per month.
To be competitive, a new entrant should be able to offer a new appealing product proposal to the
customers that would go beyond the simple music streaming service. One could be the bundle of the
listening activity with the possibility of uploading music composed by users themselves. It’s the
concept of Soundcloud, one of the rivals of Spotify and Apple Music, which anyway only offers the
music generated by users’ themselves and has no contracts with record labels, excluding it from the
mass market. We might think of another media streaming company such as Netflix to enter this
industry, but besides the fact that Netflix already declined this possibility, we would assist at a
denaturalization of the offer: watching a movie or a series and listening to music, two things that
can’t be done at the same time. Moreover, Spotify and Apple Music’s users look for music to listen
to mainly when they are busy doing something else, such as studying, working out, running,
cooking, and so on. If they needed to associate a video to the music they could simply go on
YouTube platform, but that would satisfy a different need. In the long run the main players in music
industry will have to develop a new product offer, but now there seem to be a stable growth with the
offering already in place.
 Threat of substitutes
YouTube can be considered as the closest substitute platform for Spotify and Apple Music.
Although, as we said before, it satisfies the need to see music videos not to just listen to music
while doing another activity, it could be used as a radio thanks to its function of automatic playback
of videos one after the other. It automatically creates music videos playlists to listen to and it’s free
of charge, so customers could consider using it instead than opening Spotify or iTunes premium
accounts.

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Netflix, doesn’t offer music in streaming but it’s anyway a substitute. This because it competes with
Spotify and Apple Music on how people spend their free time. When a person watches an episode
of a Netflix series, he or she spends 40 minutes not listening to music, and consequently creating
zero value and no revenue for the two companies.
Other substitutes are represented by the category of physical CDs, vinyl, tapes, and by the digital
category of mp3 files. These last ones had suffered a lot their substitution from part of music
streaming services, and not vice versa. “The music industry has invested heavily in legal streaming
in the war against illegal downloading” (Wallis, 2012) and this substitution managed to drastically
diminish the piracy download phenomenon. All these music support substitutes are anyway much
more expensive than a premium subscription to our two services. Customers might prefer live
music, but even concerts are much more expensive and don’t last more than some hours. Radio
could be a good substitute with the only fault of not being able to choose which tracks to listen to.
Even in cars, usually the place where radio gets listened to more, nowadays there are usb plug-ins
that facilitate the connection of smartphones with Spotify and Apple Music apps to the stereo
system.
We can conclude that the threat of substitution is low from one side and strong from media
companies such as Netflix and YouTube. Also, customers’ needs can change very quickly and
Apple Music and Spotify and are now trying to diversify their offering as we will see later in the
paper.
 Bargaining power of buyers
In the case of Spotify and Apple Music, buyers are all the people that possess an internet access:
47% of the world population according to a recent study (Taylor, The Washington Post, 2016).
Many buyers create no risk, similarly it’s unlikely they would vertically integrate backwards to
offer music streaming services themselves. We can’t say that customers have a great power, but

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since the product supplied by the two companies and by competitors is constituted by music
streaming services, which is an undifferentiated service, it’s clear that buyers could easily switch
from one platform to the other. That’s why the two companies “require continuous innovation and
investments in research and development activities as well as new product development” (Holm and
Günzel-Jensen, 2017) to try to differentiate their offering from each other.
Spotify would result for sure more damaged in case large groups of customers decided to switch to
a competitor, since the Swedish companies doesn’t have any other profitable asset besides its music
streaming platform. Apple Music instead could still result competitive by having a big mother
company such as Apple Inc. covering its back.
4) RESOURCE BASED VIEW ANALYSIS
VRIO Framework
 Tangible resources
- Financial resources
They are hard to evaluate for Apple Music since the company is part of the division
“Services” of Apple Inc. and we only have access to the cumulative revenues of this last
one. The financial information that we obtained are based on the annual report of Apple Inc.
for 2016:
o The “Services” division doesn’t seem to have problems of liquidity by having
increased its net sales to $24,348 million, an increase of +22% compared with the
previous financial year. Calculating that Apple Music at that time had 20 million
subscribers that paid each $9,99 on average each month of the year we can estimate
the contribution of Apple Music to “Services” division in $2,398 million, the 10% of
total division net sales. Knowing that during 2017 subscriptions kept on increasing,
we can say that financial resources of Apple Music are solid, also based on the recent

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fourth quarter results for 2017 which showed an increase in revenues of +34% for
“Services” division compared to the same period in 2016. We should also not forget
that Apple Music is sustained by a big public corporation such as Apple Inc. which
can use its revenues from other sectors to promote the success of this music branch.
Bradshaw says (as cited by Vendrell-Herrero et al., 2017) that “Apple revenues on
products are dropping at 8% in 2016, and the company is shifting its focus on the
digital service division, including App Store and Apple Music”. A new focus for the
Cupertino company that for sure will strengthen the competition with the rival
Spotify in the music streaming industry.
o Spotify’s revenues, taking the data coming from its consolidated financial statement
of 2016, still do not cover the half of the entity of its losses. In figures, the company
increased its revenues by +52% compared to the previous year, reaching quote $3.3
billion. These numbers are not enough anyway to cover the losses which increased
by a much greater margin: +133% compared to 2015 (McInthre, Forbes, 2017).
Spotify, choose to continue to raise money as a private venture rather than go public
through an initial public offering (Garg and Furr, 2017). In fact, it “chose a growth-
before-profitability strategy and operated with a revenue-deficient business model for
many years and keeps on doing so” (Holm, 2017). Waiting for its probable public
listing at the end of 2017, which should grant Spotify a definitive push towards
profitability, we can see that its financial position is not as stable as Apple Music
one.
- Physical resources
o Apple has more than 500 Apple stores worldwide which gives the firm a competitive
advantage in terms of retail location. Apple Music can enjoy this synergy with the

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mother company and the other Apple products and services which are promoted by
these Apple stores.
o Spotify doesn’t have retail properties; its physical assets are limited to its
headquarters and subsidiaries.
- Technological resources
The technology at the base of Spotify and Apple music is the same. Their music streaming
platforms rely on servers to store music tracks and on a user-friendly interface for electronic
devices, such as smartphones and computers, that customers can easily use. The
communication between interface and servers passes through the web.
They both possess many patents, but there is an essential part in which they are different:
o Apple Music has a specific and unique hardware/software combination since it
produces both the technological devices and the software and apps that will be
installed in them. With the latest updates of iOS operating system (the software used
by Apple devices), Apple Music gets automatically inserted in the portfolio of apps
of the customers, who afterwards can choose whether to pay for a premium
subscription or not. Moreover, selling devices with Apple Music pre-installed is a
type of bundling strategy already seen for example with Windows operating system
and Internet Explorer as a browser, and it proved to be very effective in the past.
o Spotify doesn’t rely on this kind of hardware/software combination by being a
merely service software producer.
- Organizational resources:
Both companies have organizational structures built around functional units.

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o “Spotify implemented an organizational structure based on agile teams, called
squads, which are self-organizing, cross-functional, and collocated” (Mankins and
Garton, 2017). This allows the replicability of best practices developed by squads
through their diffusion and adoptability from the bottom to the upper parts of the
organization.
o Apple Inc. has an organizational structure based on functions, so that Apple Music is
integrated with them. The three main expertise around which these functions orbit
are marketing, operations and design. All these functions take care of Apple Music
to obtain a better fit with the other Apple products. Employees that take care of
Apple Music also take care of iPhone or iTunes or other products and services of
Apple.
- Product portfolio
o Apple music has a catalogue of 40 million songs and gives users the possibility to
integrate their own iTunes libraries in the service.
o Spotify offers over 30 million songs and bespoke playlists made for users weekly
(Sassard, Reuters, 2017).
Besides music, both companies offer podcasts and Apple Music also tv shows on
demand.
 Intangible resources
- Innovation and creativity resources:
o “Spotify has an experiment-friendly culture within its organization which stimulates
people in finding new creative and innovative ways to solve problems or carrying
out tasks, all of this without losing the benefits of repeatability” (Mankins and
Garton, 2017).

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o Apple Music is known for its revolutionary products such as iPhone and iTunes.
Innovation is still today present, proof the large number of patents registered every
year.
- Reputation and brand power resources
o Apple brand has been declared “best global brand of 2017” by the prestigious
branding agency Interbrand. Its value reaches $184,154 million. All the aura of
prestige and elegance that Apple brand has, also reflects with an umbrella effect on
the apps, the products and the services developed by the Cupertino company,
including Apple Music.
o Spotify brand doesn’t appear in the Interbrand ranking which considers only the 100
most valuable ones. Anyway, its position of leadership in the music streaming
industry makes it easily recognizable in most of the countries where the service is
present, and its reputation of music distributor is gaining more and more consensus.
Both between customers and record labels.
- Human and managerial resources
o Apple Music can count on Jimmy Iovine as CEO, who comes from the music record
labels world, having been president of Interscope records until 2014, now part of
Universal Music group. He owns a precious knowledge about the music industry and
knows how to deal with the people working in there. This managerial resource
allows Apple Music to have favourable relationships with suppliers. "Music licenses
take a very long time to get. To this point, I still haven't met anyone that can get it
done in less than six months. I think the only company that does it faster is Apple”,
said Spotify’s CEO in an interview (Covert, Gizmodo, 2011). Moreover, thanks to
his contacts between the music artists community, Iovine managed to involve many

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musicians in the creative part of product development to give more value to its
streaming service. Also, other Apple Music employees are chosen after a though
selection. The engineers are prevailing on the other divisions.
o Spotify’s CEO and founder, Daniel Ek, comes from tech companies such as uTorrent
and Advertigo, and until now has guided Spotify in a smart way making it the leader
of the music market. Engineers are also present in large numbers between Spotify’s
employees.
For both companies this engineering presence is a precious source in terms of
product development.
- Network resources
o Apple can rely on a base of 588 million customers according to an esteem made by
Credit Suisse in 2016. We can suppose the base increased further in 2017 with the
release of the new iPhone X, anyway only operating systems with iOS 8.4 are
compatible with the app Apple Music. So, we must exclude from the base all
customers owning iPhones that came out before iPhone 4S (in 2011). Even counting
that, a consistent part of the world population owns one or more Apple devices
(Credit Suisse talks about an average of 1.7 Apple devices per person) that can
support Apple Music. This large network already gives a substantial competitive
advantage to Apple Music, by the fact of being automatically available for most of
Apple customers. As we have seen before, Apple Music took only 2 years to gain
half of the paying subscriptions that Spotify currently has. The main reason is the
existence of this big Apple network.
o Spotify had to fight to develop a network of customers as soon as possible not to lose
against other music streaming competitors, in fact one of the chief purposes of

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freemium, the business strategy chosen by Spotify, is to attract new users (Kumar,
2014). Now that it has 140 million active users (Reuters, 2017) it can count on a
solid network on which to base its further penetration in the markets where it’s
already present. Even just the word of mouth between customers proves to be a
strong marketing technique (Holm, 2017).
Capabilities
- Marketing capabilities
o Apple Music uses, as a marketing tool, windowing strategies. They are a way of
showing consumers partial content for free, to attract consumers to purchase the full
product, such as Parry, Pogrebna and Vendrell-Herrero tell us (as cited by Vendrell-
Herrero et al., 2017). It’s a method used by Apple Music in synergy with iTunes,
where customers can find their favourite music tracks to buy, but before, they are
given the possibility to listen to a preview of the track, or the chance to subscribe to
Apple Music to listen to the entire track without the need to download them. In
addition to this strategy Apple Music pays artists more to have the possibility to get
their songs on its platform in exclusive for a certain amount of time. Apple’s
approach aims to sidestep licensing fee arrangements by directly negotiating terms
with music producers (Sudler, 2013). With this method it pushes fans of the artists to
subscribe to the service to listen to a new album before others. It also sponsors
artists’ concerts to have the possibility of filming the event and streaming it as
exclusive content on the Apple Music platform. The marketing game of Apple Music
plays on exclusivity to give added value to its offer.
o Spotify according to its freemium strategy doesn’t hide from free users any type of
content, instead, it shows them immediately almost all its functionalities. “Free

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features are a potent marketing tool, the freemium model allows a new venture to
scale up and attract a user base without expending resources on costly ad campaigns
or a traditional sales force” (Kumar,2014). Also, Spotify, as Apple Music does,
offers its subscribers new albums in exclusive on its platform and sponsors live
performances of artists to stream subsequently.
- Partnership management
o Spotify results to be a champion on this capability, in fact during the years has
developed a series of relevant partnerships to expand its base of customers. The most
famous are the ones with Facebook and Twitter which enable users to share music
with social media friends. “Social network websites allow quick and practically free
product distribution, access and penetration in new markets and sharp increases in
product awareness” (Holm and Günzel-Jensen, 2017). Other relevant partnerships
are the ones with: New York Times that bundles Spotify Premium with digital
newspaper subscriptions (Hu, Forbes, 2017); social network Tinder (source Spotify
Press, 2016); car manufacturer Ford; mobile operators to pre-load the app on their
handsets; Qantas airline (Hosie, The Independent, 2017); Uber; PlayStation.
o Apple Music has partnerships with car manufacturers and airlines but doesn’t focus
much on partnerships since unlike Spotify it doesn’t need a fast growth to sustain its
business model.

23. 23
Apple Music
Value Rarity Imitability Organizational
Financial resources ⱱ ⱱ
Physical resources ⱱ ⱱ ⱱ ⱱ
Technological resources ⱱ ⱱ ⱱ ⱱ
Organizational resources ⱱ ⱱ
Product portfolio ⱱ ⱱ
Innovation and creativity resources ⱱ ⱱ
Reputation and brand power resources ⱱ ⱱ ⱱ ⱱ
Human and managerial resources ⱱ ⱱ ⱱ ⱱ
Network resources ⱱ ⱱ ⱱ ⱱ
Marketing capabilities ⱱ ⱱ ⱱ ⱱ
Partnership management ⱱ
Spotify
Value Rarity Imitability Organizational
Financial resources ⱱ
Physical resources ⱱ
Technological resources ⱱ
Organizational resources ⱱ ⱱ
Product portfolio ⱱ ⱱ
Innovation and creativity resources ⱱ ⱱ
Reputation and brand power resources ⱱ ⱱ ⱱ ⱱ
Human and managerial resources ⱱ ⱱ ⱱ ⱱ
Network resources ⱱ ⱱ ⱱ ⱱ
Marketing capabilities ⱱ ⱱ ⱱ ⱱ
Partnership management ⱱ ⱱ ⱱ ⱱ
From the VRIO analysis we can see that Spotify compared to Apple Music has a sustained
competitive advantage for what concerns its partnership management capability, while in areas like
physical resources and technological capabilities the follower prevails on the leader with its Apple
Stores and its hardware/software combination. Apple Music has also a temporary competitive
advantage in its financial resources.
5) INSTITUTIONAL BASED VIEW ANALYSIS
We’ll conduct an analysis on the institutional environments in which the two companies
operate, starting from their country of origin where their headquarters are also situated: Sweden
and United States of America.

24. 24
Sweden
USA
(source Hofstede
Insights)
From Hofstede’s dimensions of cultural values, we can see how the different characteristics of the
two countries affect the organizational structure and the strategy of Spotify and Apple Music.
Power distance values are low for both companies which means for instance that managers count on
the experience of their team members and have with them informal relationships. Both countries
score very high on individualism and this feature is reflected in both companies’ hard selection of
employees, only the best can enter the two companies. We see the first big difference between the
two, in the fact that Sweden is a feminine country while USA is masculine. We can agree that
success for Apple is very important, Steve Jobs was the symbol of this competition-driven attitude
and the company keeps charismatic leadership within its culture. Jimmy Iovine, actual CEO of
Apple Music, reflects exactly this masculine self-realization attitude. He reached success starting to
work as a humble sound technician ending up being the CEO of one of the most promising
businesses of Apple. His decision to pay royalties to the artists even during users’ Apple Music free
3-months trial was carried out by himself against many opposite advices showing a clear non-
consultive behaviour. Also, he often sends verbal signals to Spotify by talking to the press, trying to
scare the competitor. Daniel Ek, CEO of Spotify, on the other hand, is calm and reflexive and this
attitude was demonstrated many times during the patient initial negotiations with suppliers and
artists to obtain licensing contracts. The most famous case is the one with artist Taylor Swift that
refused to stream her famous albums on the service for many years and keeps on denying
immediate access to the album on streaming services (Nicolaou, Financial Times, 2017). The

25. 25
uncertainty avoidance dimension is found in their different processes of internationalization which
we’ll see later. Indulgency is high for both countries and this is reflected perfectly in their core
activity of music streaming. They have the goal of enhancing life with easier music accessibility.
Long term orientation is higher for Sweden and lower for USA, demonstrated by the constant
inexorable growth of Spotify and the born of Apple Music, developed only in a second time, when
iTunes sales started to decline.
Internationalization of the 2 companies
The cultural differences between Sweden and USA also influenced the different expansion
strategies of the two companies. Apple Music is available in 125 countries, 58 countries more than
Spotify which is currently at 67. The absence of Spotify in big markets such as China, Russia, India,
and Africa gives Apple Music a first mover competitive advantage in those countries. Though, not
in all of them. In China, for example, the company Tencent who tried to acquire Spotify recently,
owns 3 different streaming services with 17 million subscribers paying premium fees, and 700
million users per month (Atkinson, BBC News, 2017): an incredible market potential. Spotify
already started its expansion in Asia in 2013, by first entering small markets such as Singapore and
Hong Kong, treating them as experiments for a further internationalization. Since the strategic
orientation of freemium business model companies is focused on constantly expanding their user
base, Spotify should have considered an aggressive internationalization (Holm and Günzel-Jensen,
2017). Instead, differently from other born global tech enterprises with the aim of invading as many
markets as fast as possible, Spotify strategy foresees to take internationalization step by step. As we
have seen before, this reflects the Swedish cultural long-term orientation attitude. “We could’ve
settled for just being the largest service for music streaming in Sweden. Then we would have been
profitable today. But instead, we are investing almost all revenue to grow globally, and it costs a lot
of time and money”, said Forster, sales manager in Europe for Spotify (Gelin, Dagens Nyheter,
2015). We only need to think that before entering US the company waited 3 years because it

26. 26
wanted to be sure of its success in Europe. Not so many years for normal companies, but an eternity
for tech ones. To enter the profitable Japanese market, it waited for other Asian experiments to be
successful and finally approached in 2016.
The internationalization strategies of Apple Music and Spotify differ for many factors. Anyway,
one thing they have in common is that for every market they decide to enter, they need to launch a
local version of the platforms: with playlists and artists coming from the new country. This means
establishing new contracts with local record labels, get in touch with the artists and dealing with lot
of bureaucracy, and of course the language. In other words: “localizing everything”. Apple as an
already established corporation already knows all these markets in which Spotify is trying to enter.
Jimmy Iovine from Apple Music said, referred to the competitor, that “localizing everything it’s
going to cost a lot of money and that Spotify have a problem that Amazon doesn’t have”
(Bradshaw, Financial Times, 2017). In fact, also Amazon Music Unlimited such as Apple Music
can count on large financial resources flows from its parent company.
Some specific cases help us to see the impact of different institutional drivers on the outcome of
Spotify and Apple Music internationalization success or failure. For example, when Spotify tried to
enter the Russian market in 2015 a series of factors made it desist:
Coercive drivers - The government approved that year new laws for governing the
internet
- Obligation to store data in Russian servers for foreign companies
Normative drivers - Failure in finding agreements with mobile operators
Cognitive drivers - High level of piracy and hackers
(source Baird, The Guardian, 2015)

27. 27
All these factors summed to the difficult economic situation of that year in Russia and the continued
terrorists’ attacks, created a difficult political situation towards foreign companies. Apple Music on
the other hand entered the same year quite successfully in the Russian market where it was already
present with Appstore and iTunes since 2013. The experience gained with the time spent in the
market and the institutional rules that govern it, gave the streaming service an advantage in
conforming to the drivers seen before and gave the company big push to reach its today’s 600 000
subscribers (Kazlov, Billboard, 2017). Now the company must face an increasing competition from
local streaming company Yandex which adopted the same freemium strategy of Spotify and is
steadily increasing its market base with 20 million active users per month.
Where Spotify has been one of the few European internet companies to have succeeded is the home
market of Apple Music: the US. It entered the market in 2011, when Apple Music still had to be
created, and the only challenger was Pandora, a music streaming radio service. Spotify beat it
thanks to its possibility to choose which tracks to play and most of all thanks to its freemium
strategy.
Spotify conformed to almost all the institutional drivers, even waiting a long time to obtain the
licensing agreements needed to stream music. Regarding the normative drivers Daniel Ek managed
to convince “the big three” record labels after long negotiations that also music streaming could
generate revenues. A certain amount of time to “educate” the people of music industry to this new
business model was needed, but after that moment Spotify broke the norms of music industry also
Coercive drivers - Government laws on music licensing agreements
Normative drivers - “Big three” record labels influence on the music industry
Cognitive drivers - Similar patterns of music listened by Europeans
- English language/easiness to communicate
- Cultural similarities with western Europe countries

28. 28
in the US. It became a disruptive innovation capable in few years to revive the revenues of the
whole music industry.
Apple Music 4 years later entered 100 different markets at the same time in occasion of its launch,
strengthen by its hardware/software combination and its presence with iTunes in the quasi-totality
of world countries. Both the step by step internationalization strategy of Spotify and the “everything
now” one of Apple Music seemed to work very well until now, and they also perfectly tell us the
difference of approach between companies coming from different countries.
6) KNOWLEDGE BASED VIEW ANALYSIS
Organizational structure
 Spotify
Spotify’s organizational structure can be summarized with the following scheme:
(elaborated from Spotify consolidated financial statement 2016)
Main operatingcompany(Sweden HQ)
USA Operating companySales,
marketingand
customer
support(UK)
Sales and marketing subsidiaries in
Spain, Norway, Netherlands
Sweden, Germany, France
Sales and marketing subsidiaries in
Australia, Canada

29. 29
We can conclude that it’s a geographical area structure with the main operating parts of the
company located in the country of origin (Sweden) and the United States of America, this last one
being the main market in terms of revenues for Spotify. The two, together with the UK subsidiary,
represent the central core of the company, in fact, the research and development departments reside
within their walls. They are the engineering backbone of the company, dealing with product
development, design, data research and insights. All the other subsidiaries are mainly focused on
marketing and sales functions and are split in offices in all the countries mentioned above in the
chart. Of course, there are other smaller offices also in the Asia region, such as in Japan, the last
country entered by Spotify, and in South America.
 Apple Music
Apple Music organizational structure is situated within the “Internet software and services” function
of Apple Inc. The structure of Apple is strongly hierarchical and divided by functions.
(elaborated from Apple Annual Report 2016)
The subcontractor manufacturing companies of Apple in China and in other developing countries
and the European headquarter in Cork (Ireland) that deals with logistics are not seen here since they
HQ Cupertino
(USA)
Worldwide
marketing
Design Internetsoftware
and services
retail Hardware
engineering
FinancialSoftware
engineering
Apple Music

30. 30
matter relatively less with Apple Music service. This structure reminds us of the international
division one, where all the divisions are separated from each other. In this case Apple Music is
under the direct control of internet software and services function but develops its offer in
collaboration with all the other functions to obtain a better fit with Apple’s products and marketing
style of promotion. In total Apple has offices, subsidiaries, plants in 48 different countries
worldwide (source Apple careers website) and we can assume that at least for every region (Europe,
Asia, South America) there are people taking care of adapting Apple Music to the different markets.
Knowledge management
 Spotify
The geographical area structure best fits a localization strategy, and it’s right this strategy that the
market leader in the music streaming industry chose to follow, against all the expectations for a
born global that speaks to the mass market such as Spotify is. By having R&D sites in Europe, UK
and USA, Spotify gains heterogenous knowledge generated in different parts of the world. This
allows Spotify to have a better specific understanding of the European and American markets, so to
tailor marketing activities according to these different kinds of knowledge. Spotify understood that
different markets require different needs even in terms of music offer and advertisement. Anyway,
the company still operates in loss, because efficiency has not yet been reached by giving priority to
local differentiation. A certain degree of synergy exists in that the collection of big data, such as
music listening habits, from the different locations where Spotify is present in the world.
“Understanding the users’ online behaviour is a key competitive advantage for a freemium business
and the successful companies spend a great deal of resources in building their data analytics
capacity” (Holm and Günzel-Jensen, 2017). These synergies are anyway limited because much of
the knowledge developed at subsidiary level is retained within them and can’t be applied in other
markets. For instance, Japanese music preferences won’t be the same as Italian ones.

31. 31
Another way through which Spotify manages its knowledge is through acquisitions. One of the
most important ones happened in 2014 when it acquired The Echo Nest, a “music intelligence”
company that uses machine learning technology to connect people with music they love
(Ransbotham, 2015).
 Apple Music
The international division structure is correlated to a home replication strategy which Apple
strongly carried on during the years by selling in all the countries the same products (iPhones,
Macs, and so on) and with the same marketing techniques (the aesthetic premium storytelling to
new generations). Apple Music was launched contemporarily in 100 different countries on the date
of its release, everything makes us think that a replication strategy has also been used this time.
Wrong. On the contrary, the music streaming service of Apple has a high degree of differentiation
in every country. These differences result clear by looking at the offer of music that vary from
country to country, to satisfy the tastes of different listeners. Anyway, the main flow of knowledge
arrives from the headquarter to the subsidiaries reflecting the home replication strategy. The local
knowledge is adapted and built on parent company functions’ one.
7) THE STRATEGIC FIGHT
Cooperative strategies
“More and more industries across the board are transitioning from vertical integration to an era of
value chain fragmentation” (Lampel and Germain, 2016). Alliances are now playing an essential
role. As said previously in our resource based view analysis, Spotify has a sustained competitive
advantage in creating partnerships: on the homepage of their website the devices on which to use
the music platform are clearly specified. Next to the classic pc and smartphone, PlayStation and
Xbox, respectively, the gaming consoles of Sony and Microsoft, make their appearance. “Through

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Ford’s connected car platform, customers can add the Spotify application to listen to music”
(Subramaniam, 2016). Spotify’s alliances comprehend sharing economy companies such as Uber,
transportation companies such as Virgin American airlines and information companies such as New
York Times. “Creative industries, such as music streaming one is, exercise influence on other
industries not only because their organizations and modes of operation provide models that have
certain advantages, but also because the relationship they develop with customers suggest new
patterns of consumption” (Lampel and Germain, 2016). The most important alliance obtained by
Spotify is undoubtedly the one with the king of social networks: Facebook. Spotify exploited the
social network to pull new customers in. “Formalized Facebook partnerships materialized in
integrated user accounts” (Nylén and Holmström, 2015). Tinder and Twitter are also part of these
partnerships. Now it’s possible for users of Spotify to share their favourite songs on additional
platforms.
The goal is clear: to expand the user base and, possibly, to acquire/convert more premium
subscribers. For instance, on Uber cars only Spotify premium users can use the app. There’s also
another reason, which is not immediately recognizable, that pushed Spotify’s alliances. Digital
products and services must not only be efficient to use and easy to learn, but must also provide a
rich user experience, and so “firms need to clearly articulate the value proposition of each digital
product and service” (Nylén and Holmström, 2015). “Creating experience is becoming
progressively more and more important” (Lampel and Germain, 2016). Associating Spotify offer
and enriching it with partnerships and possibilities to use the platform in collaboration with other
services and products is a form of differentiation. These alliances are also used as new distribution
channels for the music streaming service and are so situated mainly at the bottom of the value chain.
On the opposite side, Apple Music is not specialized in alliances with the distribution part of the
value chain. It’s true that also this music streaming service is implemented in cars using CarPlay
systems and on some airlines but since its network of potential customers is constituted by the large

33. 33
Apple users group, it doesn’t need additional distribution channels. Apple Music looks for other
types of alliances: upstream ones. “In its original deals struck with the music labels two years ago,
Apple had agreed to keep less money from the music industry than rival Spotify, as the tech group
looked to position itself as the artist-friendly streaming service” (Nicolaou, Financial Times, 2017).
Apple Music seeks vertical alliances with record labels by paying them more than the rival.
The two companies use different kinds of alliances: vertical alliances with suppliers are preferred by
Apple Music that, having a stronger economic position compared to Spotify, can pay them more.
Spotify as a relatively young company is not able to leverage particularly significant financial
reserves compared to the well-established competitor company. It prefers to rely on horizontal
alliances based on sales of complementary goods and services, as in the case of New York Times
partnership, or to reach different industry segments with other similar sharing social platforms, such
as Facebook.
Competitive strategies
Spotify and Apple Music have bad blood. The competition between leader and follower hasn’t
spared aggressive moves between the players, most of all from part of the American company.
Apple Inc. was already preparing the ground for Apple Music at least one year before its launch.
After acquiring audio equipment maker Beats Electronics in 2014 to put its hands over Beats Music,
its online music streaming service, the following year Apple pushed record labels to force streaming
services like Spotify to abandon their free tiers. At the beginning, Apple didn’t concentrate directly
on the competitor its aggressive tactic, but proposed to pay YouTube’s music licensing fee to
Universal Music Group, if the label removed its songs from the video sharing platform (Zhang,
2015). This to hit hard the music videos offered by YouTube for free to the internet audience. If
Apple could eliminate the free tier from its rivals, it would have managed to largely reduce the
competition that Beats Music would have faced for its re-launch under the name of Apple Music

34. 34
(Zhang, 2015). From an institutional point of view this set of aggressive tactics which could put
rival music services at a disadvantage, had short life. In fact, “it triggered preliminary investigations
from the Department of Justice, Federal Trade Commission, and even the European Union’s
Competition Commission” (Zhang, 2015).
Customers preferences switched from music ownership to music access and made Apple iTunes
less and less relevant as years passed by. Its incorporation in Apple Music has signalled that Apple,
once innovator and saviour of the music industry, left the throne to Spotify. The American company
started to chase the Swedish company only two years ago, but immediately tried to recover its late
comer disadvantage. Spotify didn’t seem too worried about the new comer from what we can read
in its 2016 consolidated financial statement: “subscription only models have not yet proven scale
and free user models, whilst scaling, have not yet proven a path to profitability. Spotify has the
combined power of both”. In substance, a signal of forbearance towards Apple Music and a
declaration of strong self-confidence in its own “freemium” business model. In the meantime it
might have changed idea seeing Apple Music currently growing at 24% per year, as Bradshaw tells
us (as cited by Vendrell-Herrero et al., 2017).
The main competitive game played by the two actors focuses on their different business models:
Spotify’s freemium and Apple Music subscription-only. We already talked in depth about their
advantage and disadvantage all over the paper.
Diversification strategies
The diversification strategies of the two companies follow similar paths. They are both used to buy
software companies to integrate them into their music selection systems to improve the music
suggestions for their customers. We can talk of business responsiveness, because these acquisitions
help to deliver a better service to satisfy the demand of tailored music coming from the users. Much
more interesting is to explore the two companies’ multi-business synergies. In this case Apple

35. 35
music is focusing more than the rival on the production or acquisition of original video contents to
offer on its platform. This includes series and movies related to the music world (concerts and tour
films, karaoke shows) but also other kinds of tv programs, such as the Planet of the Apps, a reality
show where developers challenge each other in creating the most innovative app. So, Apple
enlarges its media offer for its subscribers by giving them not just music, but also exclusive video
content.
Spotify also entered the video territory: “the Swedish company has been looking for other ways to
entertain users and generate advertising sales without incurring the same royalty and distribution
costs” (Shaw, Bloomberg 2017). This move turned out to be not well enough promoted by the
company, so that many productions didn’t reach a large enough audience to be sustained. Now
Spotify is trying to requalify its video strategy, while Apple Music remains leader in the podcast
sector. According to the BCG growth-share matrix, we can say that the music streaming service is
the main activity or the cash cow for both companies, that allows them to reinvest in their podcast
and video production, the question marks, which could eventually turn to be profitable paths or not
(Jackson, CNBC, 2017). Spotify, to supply its lack of videos, established a new alliance with Hulu,
a movie and tv streaming service available in the USA (source Spotify US website, 2017).
Responsible strategy
Spotify has at its active numerous social projects and initiatives involving music “to engage
multiple stakeholders – artists, fans, employees, partners – to collaborate on solutions” (McPherson,
Forbes, 2017) over various problems. Its activities include: projects of music education in schools,
the protection of artists’ freedom of expression in developing countries, ear-care assistance in poor
regions and many other initiatives (source Spotify-change website, 2017). The last one regarded
president of USA Trump’s travel ban, affecting the people coming from a list of countries where the

36. 36
population is Muslim for the majority. Spotify invited music artists from those countries to create
songs with American musicians to demonstrate how music can overcome borders.
Apple Music corporate social responsibility is within Apple Inc. one, which focuses mainly on
environment protection and sustainability of the supply chain. There are no specific responsible
activities tied to the brand Apple Music and this surely causes a disadvantage of the follower
towards Spotify. Anyway, we can see how the company from Cupertino passed from a defensive
responsibility strategy to a proactive one, following scandals of its sub-suppliers’ workers suicides
in 2010.
8) SUGGESTIONS
“Discover your next favourite song, album, or artist — without ever hearing an ad. Play anything in
the vast 40-million-song catalogue, along with your entire iTunes library”
Apple Music website welcoming sentence says it all. In the underlined words we can see the main
parts on which its message focuses. It stresses the fact that the service doesn’t contain
advertisements to differentiate it from Spotify, it highlights the large catalogue of songs it has
access to and the possibility to synchronize the already existing iTunes libraries of the users with
the new service.
“Music for everyone”, “One account. Listen everywhere”, “Music, playlists, new releases”
Spotify’s main slogan and website homepage’s sentences respectively, show us how the vision of
the two companies results to be different. The underlined parts tell us about the goal of Spotify in
democratizing music (Nicolaou, Financial Times, 2017), making it accessible to everyone and
everywhere, even without internet connection for premium users. They also focus on new music
produced and released accessible in their playlists. Indeed, record labels pay Spotify so that their
artists’ song appear in the playlists most followed by users.

37. 37
The two companies have a different view of music: Apple Music gives access to paying people only
to protect artists’ work and rights, while on the other hand, Spotify strives to keep its freemium
model competitive and increasingly profitable to demonstrate that artists can make profits also
without charging with a fee all the users.
While their values differ a lot, their pricing strategies resemble:
Premium student Premium family Premium free
Apple Music 4.99$ 14.99$ 9.99$ Not available
Spotify 4.99$ 14.99$ 0.99$ for 3 months, then
9.99$ per month
Available
(prices per month for the United states market, source Spotify and Apple Music websites)
All Apple Music prices apply after 3 months of free trial, instead Spotify tends to make premium
subscribers pay immediately. Only for normal Premium accounts a discount applies for the first 3
months. The only big difference is the free modality available for Spotify and not for Apple Music.
The big question is why did Apple Music decide to apply an almost identical price strategy while it
could present itself as cost leader by putting a lower price? The financial reserves of Apple would
back the temporary losses of the music service unit until the elimination of all competition.
The answer lies in the free offer of Spotify. By lowering its price, Apple Music would probably be
able to attract some of Spotify’s premium users by convincing them to switch service, but most of
the free users would remain with Spotify. Moreover, lowering the prices might start a price war that
would eventually damage both companies. A cost leadership strategy is totally to exclude.
Continuing their customer leadership strategies is the best way to compete for both companies:
exclusive content, video material, big data analysis are the ways to win a loyal customer base.

38. 38
Apple Music should imitate rival’s partnerships path. Once quoted, Spotify will have more
resources to pay artists and will enter more countries, that’s why Apple Music should expand
aggressively now in the countries where Spotify is not yet present.
Spotify could collaborate more with third parties in selling advertisement spaces. This ‘music
marketing’ that show people products based on their listening behaviour might reveal itself more
profitable than the music streaming itself in the future. Spotify’s freemium model is for sure the
most precious competitive advantage that the Swedish company possesses, and it shouldn’t change
its business model for a premium only one in the medium term.
The music streaming industry gets more profitable and powerful day after day, it will be interesting
to see its developments in the future.
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