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Spotify business model: features,startegies…


What is Spotify

Spotify is one of the popular and most valued music streaming platform all around the globe with its ocean of songs with thousands of genres and it bagged a lot of famous singers’ albums, over it consists of tones of podcasts which is loved all-around in recent times.

Spotify was started by Daniel EK in 2006 in Stockholm, Sweden

Spotify has around 345 million users including 150 million paid users and has over 70 million songs.

Why spotiy started

Spotify started with a vision that all talented singers should be well paid and to get high recognition but the situation was contrary at that time, as there were a lot of sites where songs have been downloaded illegally such, as Napster. This was affected the music industry that valued at around $12.5 billion in the US.

Here is a complete analysis of Spotify business model

Spotify buisness model

  • A lot of music streams just focus mainly on movie songs but Spotify adds extra butter means it also dragged and drop a lot of talented artist albums into their platforms which fueled both their fame and income.                                             
  • Spotify gives one of the quickest and best recommendations/suggestions that make users engage in their platforms for a longer duration.
  • Spotify freemium model made it popular as there any such platforms providing like apple’s iTunes as it restricts the users to listen when their free trial gets over.
  • In recent times due to pandemic, all audiences shifted to listen to the podcast as of now Spotify has podcasts over 2 million.
In this way spotify business model provides lot of benefits for the singers and all other.

How spotify business model earns

  • Spotify mainly earns from its premium models as that allows to get rid of ads that interrupt very frequently and one can easily download the songs get to listen in offline mode Spotify gets almost around 90% of its income from its premium subscription models.
  • Spotify also gains from the albums around 30% remaining 70% is given to right holders and then artist receives money according to agreement made
  • Another direct way of income by running ads on their platform.

spotify’s net revenue in 2020 is 7.88 billion Euros.

Spotify startup Acquisitions

Spotify acquired a lot of companies till 2021 because to improve the performance of their platform and to get a bunch of users. Spotify acquired many companies with specific reasons

  • Tunigo and Locker Room a music app for Spotify content creation.
  • The Echo Nest and Niland is a music intelligence platform to improve Spotify for its suggestion system.
  • Crowdalbum for improvement Spotify’s media sector.
  • Sonalytic for developing the best sound system
  • MightyTV mainly helps in their advertisements management
  • Mediachain for its database enhancement and security
  • Gimlet Media, Anchor FM, and Parcast podcasting companies to lead in that sector.

In this way, Spotify gained attention all over the globe. There is a lot of competition all over but Spotify remains at the top due to its talented artists and large music content.

Spotify business model gives equal opportunities for all . 

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