Mediums to play music have been changing every decade. Right from records on gramophones to the cassettes, developers have always tried to improve the ways of listening to music. The floppy had its own special appearance right until the CDs made their debut. Soon the portable storage devices came into play but just like everything else, the internet has changed the way people listen to music as well. We no longer need to keep a physical device or a device player to listen to what we like. Streaming has taken over & Spotify was one of the firsts to take the advantage of that. Technically it was the apple with the iTunes who introduced music streaming. While the iTunes was limited to only apple phone users and that too, for a premium price, Spotify, which was found in 2006 in Stockholm, Sweden, made it open source & free for everyone to stream music online.
Spotify was found in 2006 by Daniel Ek and Martin Lorentzon in Stockholm, Sweden. Their head office is in London but most of its research work is still done from Stockholm. It was launched as free & the free sign-up was based on invite-only method. It took them nearly 4 years to enter the USA. They hired Sean Parker, the infamous co-founder of file-sharing site Napster, to manage relationships with record labels. They didn’t just limit themselves to music streaming. In 2015 they launched video streaming as well.
They’ve had their own share of criticism. Many artists such as Taylor Swift have pulled back their work from Spotify sighting payment issues. Since Spotify deals directly with record labels, the actual artists get paid a very nominal amount. Their revenue distribution based on popularity was also widely criticized.
Spotify Business Model
Spotify is a video, podcast, and music streaming freemium service which offers free streaming of rights managed-protected material in its free plan.
While additional features like improved streaming quality and music download are available to users who opt and pay for their selected monthly or yearly subscription packages.
Music industry’s revenue has a bigger part of Spotify’s contribution in it.
Though Spotify hasn’t covered many countries, Spotify business model has been succeeded in comparison of many other online music streaming applications.Spotify was launched in 2008 in Sweden as music, podcast, and video streaming freemium service.
Spotify uses a freemium model strategy to make money through paid subscription and advertising.
Like Youtube and MailChimp, Their main revenue sources are premium subscriptions where they provide unlimited downloads and no advertisement.
Facebook is a social media platform business model.
LinkedIn is a human resources platform business model.
Well, the creation of a business model is not just about determining which products you need to pursue.
It is also not about making a business plan, but all about figuring out how will you develop an ongoing business value for your customers.
Always remember that a strong business model should also see additional ways to add value to your business.
To comprehend this, you have to consider yourself to be a voyager.
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There is a football occasion going to be held in your city.
All of you of a sudden understand that you have two or three rooms empty in your home that you can maybe lease on informal lodging standards?
