The Influential Factors of Spotify's Business Strategy

Abstract

Spotify, being the leading audio streaming platform globally, holds a dominant position within the business. In spite of the upward trend observed in both income and user engagement metrics over the course of several years, Spotify has experienced a substantial increase in its operational expenses. Specifically, these costs have escalated from $90 million in 2018 to a remarkable $13.05 billion in 2022. The exponential increase in spending has had a substantial influence on Spotify's financial performance. During the present fiscal year, there was a decline of 14% in the stock price of Spotify, specifically in the month of June. Despite its dominance in the audio streaming industry, Spotify has consistently incurred financial losses, primarily due to its low-profit margin business model. This research paper aims to employ the SWOT methodology in order to conduct a comprehensive examination of the components inside Spotify's business model that have contributed to its financial deficits.