Spotify: Face the music Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Spotify: Face the music Case Solution

1. Spotify’s strengths and weaknesses.

Spotify is a very demanded music streaming service that has 24 million active users, and it contained more than 20 million songs untillate 2012. It allows the people to listen to music that is supported by visual and audio catalog stream.

Strengths:

Spotify is a small device that is easy to carry and cheaper than iTunes. It provides benefits to search and plays favorite songs, which means quick access to music without downloading the songs. It offers the trends of free and premium cost for a variety of options that allow listening to more than 20 million songs free of cost. The major revenue comes from the advertisements, and it contains two major tier sources such as advertisement for free (funded by royalties) and paid subscriptions on premium, and it is 100% legal. Spotify offers amonthly premium fees of $ 9.99 for unlimited songs, which iTunes charge for approximately7 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 mobile phones that attract people in a different way.

Weaknesses:

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

2. The key difference between Spotify and Napster:

Spotify:

It has less active users. Spotify has 24 million users and it is offering 20 million songs. Spotify launched its services in the US in 2011, where it used a different approach to increase the customers in the US by offering them a free premium for six months. Along with this, it is offering two types of services; as free and premium that reflect upon key competitive difference with Napster in offering streaming services to attract the customers. Due to change in laws and customs in different countries,Spotify has to pay for the labels and artists and a percentage of revenue is shared with royalties.

Napster:

Napster launched its website services in 1999, which include free search and download of music. It increased its active users to 60 million in two years only without paying for artists and labels. Napster led to three major developments in its services, which include:

(1) MP3 Compression Technology: Napster published the standard use of audio and video formats and developed MPEG-1 Layer III for audio music,also called MP3. This provides the good quality device that can be shared easily with friends and stored in the computer by ripping the audio in CDs. (2) the rise of the internet: it involves the development of broadband connections for fast and quick download of music. (3) New devices: Napster developed a variety of software and devices to create and play the music that can be played with CD player technologies.

Key Differences:
Spotify	Napster
It has limit of 3,333 tracks store capacity in mobile	It has unlimited storage and requires three mobile phones to listen and install of the app.
It costs & 9.99 monthly premium fees	10 pounds per month cost
It is more preferable as it adds more albums and playlists.	It only offers five streams at one time