Spotify Case Study

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Spotify Case Study 1. What do the changes in the marketplace mean for the music streaming industry? Is that even the right definition of the industry? a. Spotify has gained recent competition with entities such as iTunes Radio and Beats By Dre, meaning that music is becoming more accessible to the general public without having to pay for each individual song you want to hear. People are catching on to Spotify’s idea of a monthly flat rate, which is creating more competition in the industry. Furthermore, it is has been discovered that this could be ‘inherently unprofitable’ for Spotify because their margins do not increase as they become larger. Yes, it is an industry because they do produce goods for a certain market. 2. What is the structural attractiveness of this industry? b. The fact that music fits in to everybody’s life makes it an attractive industry because many people basically need it in their day-to-day life. Whether it be driving, working, exercising or just relaxing at home, many people listen to music throughout their daily activities. There was a large opening in the industry because most other options were significantly more expensive than Spotify, so they attracted a large amount of customers very quickly. The idea of streaming music is still catching on, but it is a huge breakthrough in the music industry as a new way to listen to music on the ‘cloud.’ 3. How effectively has Spotify built and adjusted its business model to capture these opportunities? c. They have made music more readily available to the public without having to pay absurd amounts, which is a large attraction to the general public. Many users who previously have illegally streamed music have moved over to Spotify, so they have been successful, but are not making as much profit as some of the other music delivery…...

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