SPOTIFY

2. Company
Spotify is a software product developed since 2006 by the Spotify AB team based in Stockholm,
Sweden. It is a Swedish music streaming service in the form of a proprietary software and website.
This digital distribution platform allows listening to music les. The catalog can be browsed by artist
or album, and also through a personalized playlist feature.

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3.3 Innovative product and diversi cation of customers
Spotify was launched for public access in 2008.
In 2009, Spotify opened one of its rst European of ces in Paris.
By 2010, the site had 1 million users in Europe. The same year, the opening of free accounts
without invitation in France becomes possible.
In 2011, the Russian investment fund Digital Sky Technologies invests USD 100 million in Spotify,
which is valued at over USD 1 billion. In March, Spotify has 7 million subscribers.
In 2014, Spotify announced a partnership with Uber. The goal being to offer passengers to choose
the music they want to listen to during their ride time.
The same year, Spotify claims 50 million active users worldwide, the majority are under the age of
27. Competing with YouTube in terms of audience, Spotify makes the decision to enter the video
streaming business.
In 2016, Spotify announced it had reached 100 million users. However, the business model
remains fragile. So far, since its inception and despite being valued at over eight billion dollars, it
has never made a pro t. With a third of users paying, losses are worsening, from $57.8 million in
2013 to $173.1 million in 2015.
After several attempts to go public, Spotify makes its entry to the New York Stock Exchange in
2018, valuing the Swedish company at $29.5 billion. The group has 4 billion in revenue, but still
has 1.2 billion in losses due to the high cost of the catalog.
In February 2019, Spotify announced the acquisition of the companies Gimlet Media and Parcast,
which are specializes in the production of podcasts. The aim is to diversify the content offered
outside of music.
The next month, Hulu and Spotify sign a partnership to provide Hulu TV series and related music
on Spotify in one subscription to compete with Apple's similar package. They offer a joint music
and video package for $13 per month to compete with Apple's service mixing Apple Music and
Apple TV.
On July, Spotify launches in partnership with Disney by creating Disney Hub, a portal of music from
Disney movies and series
Since 2019, the freemium business model based on advertising revenue revealing its limits, Spotify
wants to convert free access users into paying subscribers to generate more revenue.
In 2021, Spotify will also launch audiobooks, a new feature that will offer classic English-language
literature, and a Kids version with a parental control option.
3.4. slide
Spotify was built around a strong corporate culture of continuous improvement
here are squads: each team is independent and has a single long-term mission that touches a
single functional block. Squads are encouraged to use Lean Startup methods to develop new
features.
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 Tribes: A tribe is a collection of squads working on a common global topic. Bringing together up to
100 collaborators.
However, the great autonomy promoted by the Spotify model presents a major risk: the loss of
economies of scale. the model suggests setting up communities dedicated to sharing knowledge
and best practices.
And the Chapters: Each employee, however, is also part of a chapter, which corresponds to an
area of business expertise. They meet regularly to discuss their problems and share their
solutions.
Spotify focuses on the relationship between development and operations. And the company
promotes continuous training for its employees (traditional training, workshops, intra-chapter and
guild knowledge exchange...).

5. News consumer slide

Finally, Spotify has the opportunity to capture new users in emerging markets and existing markets
by providing its users exclusive content that could lower its cost structure and realize a new area of
differentiation.
spotify’s marketing and sales function adds value through the use of personalized marketing
campaigns. At the end of each year, Spotify users receive a personalized report on their year of
listening, “Spotify Wrapped,” which gives users insights on their most listened to artists.
It’s bring value through increased brand loyalty and shareability.
Spotify’s main goal in social customer service is to have positive interactions with users.

6.
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Today, Spotify is a leading company in its eld with 159 million users, far exceeding Apple Music's
with 36 million, incredible when you consider that the company has to do without the Asian market.
Spotify is valued at over $22 million on the stock market.
Since 2017, Spotify has continually seen double-digit revenue growth and has kept gross margin
consistent. Additionally, from 2017-2019, Spotify showed progress in reaching pro tability;
however, 2020 resulted in a larger loss than the previous two years.
Pro tability fell across the streaming media sector in 2020, likely due to the effects of Covid-19.
Compared to other industry players, Spotify operates more ef ciently, as evidenced by a favorable
asset turnover ratio. Spotify's overall liquidity ratio has deteriorated since 2017.
Finally, Spotify has improved its debt-to-equity ratio since 2017. This change is due to the company
paying down its long-term debt and increasing its equity. The entire streaming media industry saw
a sharp increase in debt-to-equity ratio in 2020. Spotify has managed to weather the Covid-19
pandemic without taking on more debt to fund its operations, leaving it in a good nancial position
compared to its competitors.
Over the next few years, Spotify hopes to continue its revenue growth trend. I don't expect Spotify
to focus on making a pro t in the next few years. Recently, Spotify announced plans to expand to
85 new markets, giving it access to more than a billion potential new customers.
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