The success of Spotify and its strategy
The success of Spotify and its strategy
Spotify is a streaming music playback platform that has revolutionized the music market, reaching more than 140 million active users, 50 of them paying, a presence in 60 countries, and a valuation of 7,500 million euros. All this while competing with companies like Apple (iTunes), Pandora, or Amazon Music. All to success.
The origin of Spotify, a company destined for success
Spotify is a company of Swedish origin, its creator is called Daniel Ek , who created his first company when he was 14 years old, hiring his high school classmates to work on the creation and design of websites.
At the age of 16, he was rejected by Google for not having any title and founded Advertigo, a successful marketing company that he sold at the age of 23, in 2006 to the international giant Tradedoubler. He also convinced one of its founders, Martin Lorentzon, to make the necessary investment for Spotify to see the light. Among the developers was the creator of uTorrent, as a curiosity.
The birth of Spotify
Spotify was born in 2008 as a streaming music player for computers and was only available in Sweden, Finland, France, the United Kingdom, and Spain. Users could access millions of songs without having to download them.
In 2011, the company landed in the US, competing closely with iTunes, which currently beats it in terms of active users. Even so, a great leap was made when the platform was able to host third-party applications, the Spotify Platform, integrating magazines such as Rolling Stone, having its own channel or applications such as Tunewiki to see the lyrics of its own songs. At the same time, the possibility that users can see and share what they are listening to with them is introduced.
Spotify reinvents itself and eliminates the limitation of 20 hours of listening per week. The price? Add ads between songs, limitations with shuffle play, and the fact that you can’t listen to music offline.
The adaptation to the world of social networks has been overwhelming, with Facebook being able to connect and share through Messenger, and with Twitter being able to listen to songs without leaving the social network.
It is worth mentioning the launch of the “Discover Weekly” list that has exceeded 5,000 million views and is generated based on musical tastes. Personalization to power.
What can we learn from Spotify?
An adaptive strategy to market needs, user experience, and the volatility of consumer needs, in this case as pillars to convert free users into paying users.
Just as happens in Greek mythology with the myth of the Ship of Theseus, where it was built board by the board when sailing until all the boards were changed, putting it together piece by piece. Rectify the strategy based on the waves, the wind, and the storms, knowing that we can find storms and other alternative ways to reach the port.
For this, we need determination, leadership, and a large dose of desire for innovation.
If you want to know more about the success of Spotify from a strategic-business point of view, you can see the talk we had with Rodrigo González, Brand Experience Manager of Spotify, and how Borja Adanero analyzes this company. One of the many experiences that you will be able to enjoy in the ThePowerMBA program.