Adroit Market Research - Industry Insights

Spotify, is one of the leading music streaming application across the globe. The existing subscriber base of Spotify is 217 million active users out of which 100 million users are paid subscribers. The quarterly revenue of Spotify is valued at 432 million dollars.

Introduction to Music streaming application

Music streaming applications are becoming extremely popular among consumers. This is a preferred way of listening to music by many. A streaming service provides consumers access to a large number of music present in the storage. The music is stored in servers and cloud storage is accessible by app and other devices. Often with the help of internet, users can listen to s

Spotify, is one of the leading music streaming application across the globe. The existing subscriber base of Spotify is 217 million active users out of which 100 million users are paid subscribers. The quarterly revenue of Spotify is valued at 432 million dollars.

Introduction to Music streaming application

Music streaming applications are becoming extremely popular among consumers. This is a preferred way of listening to music by many. A streaming service provides consumers access to a large number of music present in the storage. The music is stored in servers and cloud storage is accessible by app and other devices. Often with the help of internet, users can listen to songs they wish by selection through applications.

Listeners also have an option of storing the music locally by downloading it. This allows the songs to be accessible even if there is no internet. The songs are stored on the memory available in the consumer’s device. It is similar to a library, wherein people can rent books and once finished reading can be returned back. Users can listen to songs of their choice and even download it for a time being, it is further returned once the user has listened to the music.

The concept of Music streaming is growing due to the immense popularity of consumers using smart phones and have access to internet at a cheap cost. The growth in the various music streaming applications is due to the technologies developed along with it. There are numerous apps that are Music streaming applications like Apple music, Spotify, amazon music and so on.

With the help of this document we will study the growth of Spotify as a popular Music streaming application.

Introduction to Spotify

Spotify was developed in the year 2006, in Sweden. The official launch of the same was done in 2008. It provides users to listen to songs from their favorite artists. Here the user can just opt for a paid subscription rather than owning the song.

It has since expanded across the world, offering users the opportunity to listen to their favorite songs. Furthermore, the user has an option to opt for a free subscription too. However, free subscriptions contains advertisements and hence can be troublesome. This might be popular among consumer, but it is definitely not popular among the artists. This is because of an ongoing controversy in terms of payment received by various artists.

In the year 2009, various media sources stated that the common perception with public was that Spotify is the ‘future of music’. Figures reported in 2015 state that almost 50 million users are present in America, Europe and Australia. This is grown by two times in the coming couple of years.

This is likely to be linked with continuous grow of the technology used across mobile phones. Data charges are applicable in this scenario. Presently, there are various other similar applications that are popular among music lovers. Some of these are Apple Music, Amazon Music, Wynk, gaana and saavan among others.

Spotify is extremely popular among users as it is easy to use and extremely handy application. It gives a platform to various new and budding artists. The application recommends weekly and top playlist that will have popular songs. The results and suggestions are based on the previous search and playlist of the listeners.

The Freemium Controversy

recently received criticism from various artists who believe they are not receiving proper money. This is because of the free subscription offered by Spotify. When it was received, only 2 percent of the overall membership were paid subscribers.

Freemium is a term that is used to describe the users of free subscription services that are offered by Spotify. As per studies the number of freemium users is more than that of paid subscribers by almost ratio of 3:1. At the time of launch there were numerous predictions made by many, which later proved to be untrue. Moreover, spotify pays 70% in terms of royalties to record label or distributers. The only waiver for this is if the artist self-owns the label and master recordings. The amount comes to an average of 0.0004/ stream of songs.

One popular incident of extremely low payments are Lady Gaga receiving only 167 dollars for her popular song “Poker Face”. The song was streamed numerous times but the payment did not justify it. The publicity associated with it further caused harm to the reputation of the company. The reduced payment structure and its inaccuracy has caused various artists to withdraw from their music catalogue.

Industry reaction to Spotify

Spotify is popular with consumers and is known as controversial by various artists. Although various known artists like Adele, have worked the popular brand. Big companies like Universal Music Group, Warner Music group and sony entertainment are huge supporters of Spotiy. It is evident that working of Spotify would be difficult without the support of these industries.

Conclusion

Since the company Spotify was formed in the year 2006, it has been dominating the market of music streaming. The popularity is growing through the years and so is the number of songs. However, the path has not been smooth for them and the rise to the top has had its own share of controversies. Many known music artist are talking against the services offered by the music industry. The presence of music streaming applications have caused decline in sales of CD. Also, it has offered users and artists the opportunity to engage with new music. Many budding artists have become famous by streaming the songs over the music streaming applications. Many of these artists wouldn’t have achieved the success if the platform was achieved. Consumers have the opportunity to explore various songs and playlist set by Spotify and to find a new budding artist for managing contracts. Spotify has number of positive impacts in the overall music industry. However, the negative point here is the part of the service that is due to the presence of freemium services on sales of artist’s album.