The Rise of Spotify: A Case Study

The assignment discusses the rise of Spotify, a music streaming service that revolutionized the online music industry. It highlights various factors such as effective use of technology, better marketing strategies, subscription options, and learning from predecessor companies like Napster that contributed to its success. The case study also mentions how Spotify's services provided convenience to users, allowing them to access music from anywhere and anytime using apps and a user-friendly website.

Running head: DIGITAL MARKETING STRATEGY
Digital Marketing Strategy
Name of the Student:
Name of the University:
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1DIGITAL MARKETING STRATEGY
Technology has greatly influenced the lives of the individuals. Now the individuals
can entertain themselves by listening to music as well as watch movies online at their own
leisure time and any place they want (Komulainen, Karukka and Häkkilä 2012). Spotify is an
online music streaming website which was launched in 2008 and develop in the year 2006 in
the nation of Sweden (Spotify.com 2018). It is a reflection of the success attained by the
company in the recent times that the company has become the parent music streaming
company in London and provides services even to the members of Stockholm (Smart Insights
2018). It is to be noted that as per a 2015 statistics, the company was valued at more than $5
billion (Smart Insights 2018).
It is to be noted that within the last 20 years the various companies have drastically
multiplied the options available to the customers who take the help of the various online
companies and music streaming websites (Smart Insights 2018). It is to be noted that there
was a time when the customers who wanted to listen to music had to attend some live
performance or listen to the songs over their gramophones. However, the emergence of
various new innovations like iTunes, iPods, Walkmans and others completely revolutionized
the industry (Smart Insights 2018). However, with the emergence of these new innovations
entailed the problem of piracy and various others. The emergence of Spotify in the year 2008
is very important in this particular regard as the customers no had to resort to piracy or to
download the songs in order to listen to songs (Spotify.com 2018). They could simply listen
to it online as per their own time and convenience and as many number of time they want. It
is to be noted that this was drastically different to the traditional system where the customers
had to download the songs in order to listen to them whereas over here the customers just
need to take care of a small monthly fee and get access to unlimited music.
The products as well as the services offered by any company plays a key role in the
overall growth as well as the development of any business organization or company.

2DIGITAL MARKETING STRATEGY
Therefore, the various companies or business organizations should conduct a thorough
market analysis as well as take into consideration the needs and the requirements of its target
customer base before the launch of any new product or services. The company Spotify
provides online music streaming options to the customers wherein the individuals can just go
on to the websites and listen to their favorite songs without having to download them (Smart
Insights 2018). The company provides a wide range of music options to the customers
wherein the people can listen to all kinds of music as per their own convenience over the
internet. The company offers two plans to the customers. The first one is the free section
wherein the customers do not need to pay anything and they can simply listen to the songs by
going on to the websites (Spotify.com 2018). However, there is one catch: along with the
songs the users will also have to listen to the various advertisements placed by the company
over there. The second is the paid section for the premium customers wherein the customers
have to pay certain amount of monthly fee to the website for accessing premium services
(Spotify.com 2018). The premium customers do not have to listen to the various
advertisements put on by the company and can have access to unlimited music and songs.
It is true that the services provided by the company Spotify at the time of its launch
were very revolutionary for its time. However, when the present competitive industry is taken
into consideration and the varied options like iTunes, Apple Music, Google Play, Pandora,
Amazon Prime Music and various others which are available to the customers have greatly
increased the competition (Smart Insights 2018). However, it is noticed that the company
Spotify has continued to grow both in terms of annual profit as well as the number of the
customers which takes the help of the services provided by them (Smart Insights 2018). Some
of the features which have ensured the continued growth as well as the development of the
company Spotify are listed below-

3DIGITAL MARKETING STRATEGY
It is usually seen that in the present world of business competition the various
companies as well as business organizations use different kind of promotional strategies for
the promotion of the different products and services offered by them (Neck, Houghton and
Murray 2015). The company Spotify also uses various promotional strategies for the
promotion of the various services provided by it. It is to be noted that company has entered in
a tie up with various social media platforms like Facebook and others to promote the services
offered by it to the customers (Setty et al. 2013). The company also takes the help of the
various other conventional methods like Press Releases, verbal promotions, newspaper
advertisements and various others (Setty et al. 2013). The company also organizes regular
seminars and other youth activities to promote the services offered by it.
It is to be noted that the company provides two kinds of services to the customers-the
free one and the premium services. The premium customers need to pay roughly around $12
per month in order to avail the premium services (Smart Insights 2018). The premium
services include unlimited access to songs and the customers can even download the songs.
Another important feature of the premium services is the absence of the various
advertisements.
The best feature of the services provided by the company Spotify is that the users can
listen to the music of their own choice from anyplace they want over their desktop or mobile
phones (Swanson 2013). The only thing which the customers need is a computer or a mobile
phone and an internet connection to avail the services of the company. It is interesting to note
that the company presently has more than 50 million subscribers who utilize the services
provided by the company on a regular basis (Swanson 2013).
The primary target base of the company Spotify are the people the younger generation
which likes to listen to the various kinds of music and are familiar with the various kinds of

4DIGITAL MARKETING STRATEGY
new technologies as well as innovations (Kreitz and Niemela 2012). Having said that there
are various people belonging to the older generation as well which takes the services of this
particular company to listen to music over their phones as well as computers. It is to be noted
that presently the company also indulges in various kinds of youth activities to increase the
number of its subscribers in that particular generation of people (Neck, Houghton and Murray
2015). It is significant to note that the various online platforms where the company does its
promotional works also help the company to draw more future potential customers.
It is to be noted that the company Spotify often takes the help of the various social
media platforms and campaigns to increase the number of their customers. A typical example
of this strategy followed by the company is the collaboration of the company Spotify with the
automobile company BMW for their promotional event the “American Road trip” (Smart
Insights 2018). The participants in this particular campaign were expected to ride in their
BMW vehicles and listen to online music using the services of the company Spotify. The
participants were expected to listen to the particular songs of the region through which they
were passing. It is to be noted that at the end of the campaign some 14,000 new playlists were
generated by the participants (Smart Insights 2018). Therefore, it can be said that the
campaign was kind of a symbiotic process for both the companies.
According to the majority of the people the primary advantage of the services
provided by the company Spotify is that the users do not have to manually go to any stores to
buy music CDs or go to a live performance to listen to the song (Chaffey and Ellis-Chadwick
2016). The customers can access the services of the company simply by logging into the
website of the company from their computer or smart phones from anywhere and anytime.
The customers are provided with convenient apps and other facilities so that they can
download listen to the music of their choice. In addition to this, the official website of the
company Spotify has been designed in such a way that the users are able to navigate the

5DIGITAL MARKETING STRATEGY
website without having much trouble (Chaffey and Ellis-Chadwick 2016). Another factor
which contributed to the overall growth as well as the development of the company Spotify
was the effective use of technology, better marketing strategies and subscription options
which it offered to the customers (Chaffey and Ellis-Chadwick 2016). It would not be very
wrong to say that the company was wise enough to learn from the mistakes of its predecessor
company Napsster.
Therefore, from the above discussion it becomes clear that various factors contributed
to the overall growth as well as the development of the company Spotify. Some of the ideas
as well as innovations used by the company Spotify at the time of its launch were too
revolutionary for its time and it totally revolutionized the online music industry. It is to be
noted that the effective use of the concept of marketing mix is one of the primary reasons for
the rise of the company Spotify.

6DIGITAL MARKETING STRATEGY
References
Chaffey, D. and Ellis-Chadwick, F. 2016. Digital marketing (Sixth ed.). Harlow: Pearson.
Komulainen, S., Karukka, M. and Häkkilä, J., 2012, November. Social music services in
teenage life: a case study. In Proceedings of the 22nd Conference of the Computer-Human
Interaction Special Interest Group of Australia on Computer-Human Interaction (pp. 364-
367). ACM.
Kreitz, G. and Niemela, F., 2012, August. Spotify--large scale, low latency, P2P music-on-
demand streaming. In Peer-to-Peer Computing (P2P), 2010 IEEE Tenth International
Conference on (pp. 1-10).
Neck, C.P., Houghton, J.D. and Murray, E.L., 2015. Organizational behavior: A critical-
thinking approach. SAGE Publications.
Setty, V., Kreitz, G., Vitenberg, R., Van Steen, M., Urdaneta, G. and Gimåker, S., 2013,
June. The hidden pub/sub of spotify:(industry article). In Proceedings of the 7th ACM
international conference on Distributed event-based systems(pp. 231-240). ACM.
Smart Insights. 2018. Spotify Case Study - Marketing. [online] Available at:
http://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/
spotify-case-study/ [Accessed 1 Mar. 2018].
Spotify.com. 2018. Music for everyone.. [online] Available at: https://www.spotify.com/
[Accessed 1 Mar. 2018].
Swanson, K., 2013. A case study on Spotify: exploring perceptions of the music streaming
service. MEIEA Journal, 13(1), p.207.