Introduction
This research paper focused on examining the impact that the online service Spotify has had on the global music creation and consumption industry. The literature review demonstrated that Spotify has had a disruptive effect on the industry and has significantly contributed to innovative transformation. Among the key innovations that have been introduced by the music service and have rapidly become widespread, including on competitive platforms, is the concept of fixed payments to music labels for listening to their own products. Despite this commercial approach, Spotify has managed to maintain accessibility for users, which allows the service’s strategies to be seen as balanced.
Discussion
Another innovation, which then became characteristic of all subscriptions, was an initiative called “Spotify Wrapped.” It makes a list of the most listened-to music during the year for each individual user. This has gained particular popularity due to the fact that people have the opportunity to post their results of the year on social networks. This was an advantage for the company, as it attracted an even more significant flow of customers and expanded the audience.
Several theoretical approaches can explain this phenomenon of Spotify’s success at once. Therefore, based on the concept of disruptive theory, the provision of a new function in a music subscription has contributed to a change in the entire industry. Many companies, such as Apple and Tidal, have also implemented the ability to create playlists in their applications regarding the music listened to by people during the outgoing year. Kotter’s eight-step change model can also be used to explain the company’s popularity. This is due to the fact that the creators of Spotify set out to provide people with the opportunity to listen to music without restrictions and financial costs; that is, it represented urgency for implementing changes. Subscription to eliminate advertising integrations has become the most productive solution for both the provider and music labels. Regarding the theory of social change, Spotify has become an innovator in adapting to the public’s preferences. This happened due to the global expansion of the music provider and the involvement of a large number of diverse artists (Spotify, 2021). Thus, depending on the alteration preferences of society, the company adjusts the algorithms of music recommendations to meet users’ needs.
The company’s strength was the offer of a new business model, which was preferred by both organizations in the industry, artists, and customers. Despite the initial complexity of creating the concepts on which the company is now based, it successfully successfully transformed the industry with its subscription system. The main reason was a change in the direction of making music accessible rather than being able to fully own the rights to own it. This can also be explained by social changes that imply a change of interest regarding users’ musical preferences.
Conclusion
It is worth noting that Spotify is taking various measures to adapt to possible future changes. Hence, in addition to its standard subscription, it has introduced a family plan and is constantly expanding its music library. Moreover, its practical analytical tools provide personalized selections depending on the music preferred by listeners. Monthly active users of the music provider are constantly growing, for example, due to the introduction of “successful product feature launches such as our Lyrics experience, as well as marketing and content initiatives” (“Spotify technology S.S. announces financial results for first quarter 2022,” 2022, para. 3). According to the framework of the innovation funnel, the company effectively develops an action plan that helps to adapt to future changes.
References
Spotify technology S.S. announces financial results for first quarter 2022. (2022). Business Wire. Web.
Spotify. (2021). Spotify expands international footprint, bringing audio to 80+ new markets — Spotify. Web.