Introduction:

Spotify is a tune streaming service available in Norway, Sweden, Finland, Spain, France, and the UK. It offers free legal access to tremendous library of music. Daniel EK and Martin Lorenzton founded the company in 2006. Spotify is very demanded music streaming service that has 24 million active users and it contained more than 20 million songs as of late 2012. It allows people to listen to music that is supported by both visual and audio catalog stream.

Its service is available in two formats for its customers; first structure is a free membership entry with advertisements and 2nd layout is top class membership where there is an extra access for cell functions. This institution is funded with the help of advertisements and premium account holders. Spotify uses P2P (peer to peer) science to operate for legal purposes.

The company is generating profit through its primary activities, which includes providing unlimited access to songs and uninterrupted streaming to all subscribers, partnership with other social media for promoting the Spotify and lastly, develop energetic platform by using innovative technology. It is analyzed in the case that Spotify has to pay more cost to royalties since the number of subscribers ultimately results in decrease in the net income growth.

Its resources include online networking construction and progression of creative stage thatgives outside engineers the chance to make outsider applications for Spotify and broad advancements through corporate organizations; furthermore, it has nearly 300 million in outside capital from financial investors.

Spotify Harvard Case Solution & Analysis

Internal Analysis:

Strengths:

Spotify is a small device that is easy to carry and cheaper than iTunes. It provides benefits to each of its users to search and play for their favorite songs, which means fast music play without downloading the songs. It offers the trends of free and premium cost for a variety of options that allows listening to more than 20 million songs free of cost. The major revenue comes from the advertisements and it contained two major tier sources such as free advertisement (funded by royalties) and paid subscription on premium, this is 100% legal. Spotify offers a monthly premium fees of $ 9.99 for unlimited songs, which is something that iTunes charges for only 7 to 8 songs. Spotify creates tailored advertising and it is presented in social media. In recent years, it is analyzed that the number of active users has tripled due to increase in the use of mobiles that attract people in a different way.

Weaknesses:

Spotify requires payment of some fees for its account subscription that can only be used in Spotify software. Spotify wants to convert the free users into premium ones in order to earn more profit. Along with this, paying subscribers have not increased since 2013. Therefore, it needed to grow its business by moving to paid downloads along with payment subscription. The issue faced by Spotify includes the blame of piracy and copyright that has caused a loss of revenue. Spotify requires internet or Wi-Fi for access to videos and mp3, which cannot be accessed through the mobile data network and it sometimes the quality of songs is not good as expected as well...................

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