Spotify, Music for Everyone E-Book

50MINUTES

• Herausgeber: 50Minutes.com
• Kategorie: Fachliteratur
• Serie: Business Stories
• Sprache: Englisch

Seitenzahl: 29

Veröffentlichungsjahr: 2017

Beschreibung

Find out how Spotify changed the way we listen to music in just 50 minutes!

Spotify is a music streaming service which was launched in 2008. Its freemium business model, which allows users to choose between listening to music for free or paying a monthly subscription to access an ad-free version of the site, has attracted 140 million active users (of whom 60 million are paying subscribers) to the site, and has generated billions of dollars in revenue, although the site continues operating at a net loss and has drawn heavy criticism from other major players in the music industry. In this concise and accessible guide, you will find out how Spotify revolutionised music lovers’ listening habits, and discover how other key players in the music industry are reacting to this change.

In 50 minutes you will:

•Learn about Spotify’s history, from its launch in 2008 right up to the present day
•Understand the site’s freemium business model
•Discover the how the rise of streaming has affected the music industry

ABOUT 50MINUTES | BUSINESS STORIES

The Business Stories series from the 50Minutes collection provides the tools to quickly understand the innovative companies that have shaped the modern business world. Our publications will give you contextual information, an analysis of business strategies and an introduction to future trends and opportunities in a clear and easily digestible format, making them the ideal starting point for readers looking to understand what makes these companies stand out.

Leseprobe

Spotify: Music for Everyone

Key information

Founders: Daniel Ek (Swedish entrepreneur, born in 1983) and Martin Lorentzon (Swedish engineer, born in 1969).Founded: Spotify was originally founded in Sweden in 2006 and has been available to the public since 7 October 2008 (when it was launched in Sweden, Great Britain, France, Spain, Finland and Norway).Sector: entertainment, music and video.Marketing area: as of 2017, Spotify is now available in over 60 countries worldwide, having launched in the United States in 2011 and in Latin America and parts of Asia in 2013.Number of users: as of October 2017, Spotify has over 140 million active users, of whom over 60 million (i.e. 42%) are paying subscribers.Annual turnover: over $3.3 billion in 2016, compared with $2.18 billion in 2015, with subscriptions accounting for around 90% of revenue and advertising accounting for the remaining 10%.Key terms: Freemium: this portmanteau of the words “free” and “premium” was first used by the American investor and blogger Fred Wilson in 2006. It denotes a commercial service which offers both a basic version which is free to access and use, and a “premium” version which offers more advanced features to paying users. The free version is often financed by advertisements and can attract users who are eventually persuaded to sign up for the paid version.Premium: a premium service is an enhanced version of the basic service offered by a service provider using a “freemium” business model. The premium service is usually significantly more expensive. On Spotify, the bonus features offered by the Premium service include higher sound quality, the option of using the service offline, and the removal of all adverts.Royalties: royalties are the payment owed to a creator in exchange for the right to use their work, patent or brand. They are a means of complying with copyright law, which recognises creators as the only individuals with the right to distribute their work until it enters the public domain.

Spotify has been hailed as revolutionary because of the way it has shaken up the music industry, causing no shortage of debate in the process. While it used to be impossible to listen to a music file without buying it, streaming technology is now sufficiently advanced to allow audio files to be played without being downloaded. As the file is not being downloaded, there is no need to pay for it, although this business model of paid downloads is still used by iTunes, Apple’s music player software, among others.

Unlike many of Spotify’s competitors, such as Google, Apple and Amazon, the company was not founded in the US, and it was only launched there three years after its initial European launch in 2008. However, the phenomenon soon gained momentum on the other side of the Atlantic: the number of songs streamed online by users in the United States increased by a whopping 50% between 2013 and 2014, while the volume of paid downloads dropped by 13% in the same period. Today, Spotify is the most-downloaded app in the United States.

There is only one fly in the ointment, but it is a big one – certain artists feel that their share of the profits is unacceptably slim, and have rebelled against the site. According to a report published in December 2013 by ADAMI, a French organisation which oversees the rights of artists and musicians, streamed songs can generate as much as 22 times more revenue than the royalties received by the artists.