Spotify’s current tagline is “Soundtrack your Life” which is exactly what Spotify allows their users to do. Spotify lets users pick and choose which songs they want to listen to, users can create playlists that play specific songs and most importantly, Spotify gives you the ability and access to discover new music. With a focus on streaming music depending on what you’re in the mood for, Spotify’s service is completely free (which is the best part in my opinion.) You may ask, since Spotify is a company that provides it’s music service for no charge, how in the world do they make revenue? The answer: it relies on Freemium & Advertising; (Anderson’s taxonomy) Freemium is which is when free services, like Spotify, make revenue by offering upgraded versions of their service. Spotify has two different upgraded versions: Unlimited and Premium. So with the free version, you have ads and can’t access your Spotify playlists and collections from any device. The Unlimited version costs $4.99/month where you basically pay for a free account without advertisements. And the Premium version is $9.99/month where you can access your whole account from any device you use and there are no advertisements. Spotify is able to maintain their services to be offered for free because they heavily rely on advertisements. Every free user has to listen to an advertisement before they can continue listening to their music.
I find that Spotify’s strategy of being a Freemium site and using advertising to make revenue is a very smart and good idea that is a success. It’s strategy is effective because users are definitely attracted to the fact that this music service site is free and they’ll be more likely to listen or at least hear an advertisement in order to get back to their music. Users, advertisers and Spotify all end up happy. Spotify is only more attractive to users because it’s so accessible (they are able to play on any device) and they make it so easy to find new music. The best part about Spotify is that they don’t overdo their ads. As some of their competition does, Pandora comes to mind. Spotify plays about 15-30 second ads while Pandora will play almost a whole minute of ads. Spotify does have competition (as any successful company should, in my opinion) Pandora and 8tracks are the two I came up with. Both are similiar to Spotify as they both rely on being a Freemium service and the use of advertising. 8 tracks attracts different kinds of users as 8tracks focuses specifically on what genre of music you’re in the mood for and actually allow users to upload and share their own mixes and music. Pandora focuses on listening to an artist, song or genre you’re in the mood for and they’ll match you with similar artists, songs or genres to the one you originally wanted. All three apps attract different users but essentially, they are all the same services and are all very successful.
MONICA 