Today’s post will be about one of the most interesting subject… MUSIC!
Music has always been a point of connectivity between human beings. People want to know what other people are listening to — especially when you are part of a group.
Do you remember that party at your friend’s house when someone took the computer to put his favourite song? Yes, the song that you liked and asked for the reference…This is what I’m talking about.
Now, If I ask you the best platform to listen music, keep and share songs among people.. what will you answer?? — as an active member of the community #Spotifycommunity— Let me guess.. Spotify right?
As a strategy Spotify used a Freemium model in which they offer 2 services — the basic service of online streaming ; where they earns on advertisement to deliver a free service. And — the premium account where more features are available ; the customer pay for the usage and don’t have to listen to advertisements.
As per say Spotify target 2 segmentations :
- #Us — The young community — that are seeking free or affordable prices platforms to sign in and settle all our favourite songs. We love to listen music everywhere, be aware of new trend artists and share our best musical discoveries with some friends.
- The advisers — that segment foster Spotify to deliver a freemium model that allows subscribers to enjoy unlimited free music.
The challenge with the Freemium model is to know how much you can give out for free. If you give out too much features for free, without any inconveniences, no one will be willing to pay for a premium version. While, If the price is considered too expensive, by the target audience, they won’t subscribe at all. In 2015, the issue with Spotify was that only 25% were premium users, that’s why the company settled lower prices for students in order to give them an incentive to subscribe to the premium version. While in 2018, a fiscal report from Q1 2018, announced that Spotify finished the quarter with 75 million Premium Subscribers and 170 million monthly active users. A user base of 75 million paid subscribers that represents a 45% increase within the last year.
Why users are more willing to choose Spotify among other stream music platforms ?
Spotify starts with a free service to engage its target to sign up and familiarise them with the application and the offer. Then, as a frequent user, you start building a consequent playlist with all your favourite songs. Here come Spotify’s drawbacks… sometime, you feel listening a certain type of music and you don’t want to be bothered by the adds. However, that is not possible with the free service. So you’re thinking about subscribing to the premium offer and here comes the customer value proposition of Spotify premium. The added value of the premium service possesses unique features as you can follow friends, brands and influencers, share on social media, and discover new music regularly. Users can also save their songs under their account to listen to them on offline mode.
Spotify offers its newness, accessibility and convenience for the end user to stream online music for a short set of time.Therefore, Spotify created a new market for customers by offering access to a whole database of songs at a low price instead of offering songs or albums at a higher price like iTunes that didn’t impact the market.
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(Jeff DUNN, Business Insider Australia, 2016)
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I think Spotify has its chance to last, its pretty well established among the people. Yes having a discounted rate for students help attracting them and I dont know how they will react once they are no more leigible for the discounted price but I also believe that if they value the service and the price difference is not much, people who have been used to use it and happy with the service, have created their own play lists will probably stick with Spotify, unless a competitor emerge in the market and provide a better value for money.
ReplyDeleteYes, it will definitely last. Spotify has managed to form a link between the user and app. It's done a good job with creating a relationship between the product and the consumer. As long as they don't go nuts with their pricing, they should be safe with the $$$ option. I guess their premium service needs to be very different to the free service in order to influence people to actually purchase the premium version and enjoy Spotify to its fullest rather than being restricted.
ReplyDeleteI couldn't be certain in saying that Spotify is here to stay. I say this because before Spotify Apple iTunes dominating in terms of music streaming platforms and back then I couldn't of imagined a platform like Spotify coming in and revolutionising the industry like it did. So I think no one can ever to certain they will remain number one. Another example of this is Myspace, which use to be the most common social media platform until Facebook came over the dominated.
ReplyDeleteI think even if prices went up many students would continue using the service as there isn't any other better alternatives at the moment to Spotify BUT, if there was an alternatives just as good then I think Spotify increasing or scrapping there student prices would mean losing some customers and market share.