Passion for Music: The Case of Spotify

Abstract

The powerful changes in the music industry since the launch of the MP3 format in the early 1990s brought both benefits to consumers, and angst to the industry players, since music became extremely easy to share. The major record companies suffered huge losses, as a series of illegal file sharing websites, also referred to as peer-to-peer-systems, emerged, Napster being one such example. Spotify launched its online platform in 2008, with the aim of becoming a worldwide alternative to illegal music sharing. The company is part of a group of evolving music streaming businesses, which experiment with different revenue logics and customer approaches. The business models based on subscriptions and freemium offers address an audience with shifting preferences, from owning music to being able to access music conveniently, fast, and regardless of location. Although Deezer preceded Spotify as the first freemium music provider, the latter distinguishes itself through the variety in titles and playlists, usage simplicity, close contact to social media and commitment towards long-term growth.