Spotify was founded by the Swedes Daniel Ek and Martin Lorentzon in 2006 and since then it has been the Platform to upload music, videos, podcasts for its consumers. Spotify has more than 70 million songs from a range of music genres from publishers and media companies, all protected and copyrighted. For basic users, you can listen to music with advertising and in the order that the platform wants, unlike premium subscribers who can configure the way they listen to their favorite artists without advertising. Spotify’s name was given thanks to one of its founders, Daniel, mistakenly heard the word ‘Spotify’. Finally, the name was given to the platform by the combination of two words “Spot” and “Identify”.
Spotify services were publicly launched (by invitation only) on October 7, 2008 in Scandinavia, the United Kingdom, France and Spain. In 2009, Spotify began offering it for free, but with limited access in the UK. So far, Spotify operates in 180 countries (end of 2021) and is expected to enter more markets
But what makes Spotify a special or different network? On the one hand, the easy classification of the playlists, the choice of your favorite albums and the practice to make promotions and interact with the subscribers of the segment you want to reach. Likewise, the well-known Podcasts are highly effective on this platform. According to the “Statista” portal, this musical social network currently has more than 182 million premium subscribers, and more than 406 million listeners, while platforms such as Apple and Amazon have 70 million and 65 million respectively.
To give us an idea of the size of the streaming market of the music industry worldwide, in 2019 it had a value of $20.9 billion dollars (Twenty thousand nine hundred million dollars) and it is estimated that by 2027 this amount grow by 17.8%, due to the increase in the adoption of smartphones and the rapid growth of digital platforms. By November 2021, Spotify is estimated to have a 32% market share.
One of the great controversies that Spotify has faced is the payment of rights to artists, since several of them have been against this platform arguing that little is paid per song listened to. Other artists have declared that the platform is not the ideal one to launch new talents, due to this in 2013 Spotify launched “Spotify for Artists” a program that seeks to support new talents by generating a base of followers and that these can generate profits.
It is true that making a profitable business from a music platform is not easy, since royalty payments, in addition to other costs, make it complicated, according to some financial reports beyond the popularity of the platform, With the growth of its recurring premium subscriber base, Spotify posted profits through 2019 since its inception. Another important challenge is its closest competitors, which bring inertia due to their great infrastructure, such as Amazon and Apple.
Although it is true that Spotify lacks the ability to precisely manage target groups or targets that can be geolocated according to socioeconomic or age levels, this platform has a variety of prices and particular characteristics that are a very good option for communicating our communication or promotion campaigns through of personalized playlists by the brand.