Innovation Case Study: Spotify

INNOVATION CASE STUDY
SPOTIFY

Table of contents
Introduction......................................................................................................................................3
Service information.........................................................................................................................4
Evaluation of the innovation............................................................................................................5
SWOT Analysis...............................................................................................................................6
Strengths......................................................................................................................................6
Weaknesses......................................................................................................................................7
Opportunities...................................................................................................................................7
Threats.............................................................................................................................................7
Recommendation for future improvement and development..........................................................8
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

Introduction
Innovation comes from many sources and can take many different forms in the due course of
time. Different innovations are responsible for creating different opportunities for society. They
create multiple sets of demands for the producers as well as the consumers. Innovation in
business refers to ideas that are commercially exploitable (Yoo, Boland, Lyytinen, & Majchrzak,
2012). A commercially successful innovation will create or add value by improving existing
commodities, services and processes or of developing a new product, service or process that
create value of no pre existence.
Founded by swedish innovators Daniel Ek and Martin Lorentzon Spotify is a music streaming
service that was officially launched in october 2008 all across Europe. It derives its concept from
the peer to peer file sharing service and revolutionised the digital industry of Music. In this case
Study there will be a detailed discussion on the innovativeness of Spotify and how it keeps in
touch with the already established services like Pandora, Last-fm and Imeem, its current
Business model and the frequency of new innovations necessary for the company to keep
Growing (Edvardsson & Tronvoll, 2013). This Study will also deal with the challenges the
company will face from other companies and the music industry itself.
Service information
Headquartered in Stockholm, Sweden, Spotify is a freemium service that provides users with
DRM- protected content from media companies and record labels. The basic features of the
application are free with limitations and advertisement while features like improved quality of
streaming and downloading content are offered to paid subscribers. The service is available in
most of Europe, the Americas, Australia, South Africa, New Zealand and parts of Asia. Most
modern devices like windows, linux, macOS, iOS, android and windows smartphones support
Spotify.music can be searched and browsed for on the basis of parameters like Artists, albums,
genres, record labels and Playlists (Björkdahl, & Holmén, 2013). Users have the options of
creating new playlists, edit them and share them on different social media platforms like
Facebook and Twitter. The service provides its users with access over 35 million songs.
With the arrival of the first wave of music streaming services the revenues of the global music
industry declined by 40% from 23.8 billion dollars in 1999 to 14.3 billion dollars in 2014. They
facilitated illegal Digital distribution and piracy. The streaming model can be considered as an
essential driver of the inflection point of the music industry. The industry reached its highest