Spotify is a popular music streaming service that allows users to browse a catalog of music, licensed from multiple record labels, and create and share playlists with other users. Additionally, users can listen to music for free with advertising or can also choose to purchase a subscription to allow unlimited, ad-free music streaming. Spotify's biggest competitors are Pandora and Apple Music which offer a similar service. “Spotify along with Pandora is one of the highest-grossing music app titles in the Apple App Store. In October 2017, the app generated $3.9 million in revenue” (statista.com). According to IFIPI, “global streaming revenues from subscriptions for labels and artists increased 39% to total $1.57 billion in 2014, representing approximately 23% of digital revenues” (MusicBusinessWorldwide.com). The app itself is gaining interest, but the artists themselves get almost nothing in return. Spotify recently lost nearly $601 million over the past year. Although Spotify operates a freemium model with the majority of its users streaming music from mobile devices, desktops or web browsers. Users who sign up for a free account receive advertisements between tracks that are part of the Spotify Revenue model. The Wikipedia entry for Spotify charted Spotify's growth (Wikipedia.org): "In November 2011, more than 2.5 million paying subscribers signed up to its service." This was followed by 500,000 premium users who signed up thanks to the collaboration with Facebook's "Open Graph", which allows people to share songs listened to there with friends. As of August 2012, there were 4 million paying subscribers responsible for revenue of $20 million per month. month. By March 2013 Spotify had grown to approximately 6 million paying customers globally and approximately 24 million active users overall. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Unlike the “dot.com era,” when start-ups with global aspirations were launched using TV campaigns, Spotify's growth has been a more modest approach based on word of mouth, public relations and co- marketing rather than large advertising budgets. The service first went live in October 2008, but has maintained its free, invitation-only service, active only in the final stages of development. “By introducing scarcity, the invitation-only element played a vital role in the company's rise. It helped create a vital element for the service, with users initially having 5 invitations to share with their friends” (Billboard.com). Similarly, Spotify's US launch used private "Beta" invites to create buzz, so that those who own social media could spread the word. To grow its audience beyond the traditional younger audience, Spotify invested more in the live TV portion of the campaign. “In 2013, they launched a multiplatform campaign, featuring a 30-second commercial during the season premiere of NBC's The Voice.” Recently, though, Spotify lost nearly $601 million over the past year even as it added millions of customers. In 2016, sales increased about 52% to $35 billion, except the net loss more than doubled. Spotify's growth has boosted sales across the music industry, reversing years of decline due to piracy and the shift from CDs to iTunes. The company said it had “corrected prior errorsaccounting statements to adjust for credit card charges, payment processing issues, royalty understatements and miscalculations for management reporting" (Spotify.com). With the new data they were able to add 70.7 to the 2015 net loss million dollars, on top of an original deficit of $208 million. Spotify attributed the 2016 loss to the cost of debt and the impact of foreign exchange movements. “The company borrowed an additional $1 billion in March of 2016 and was subsequently given a valuation of $13.”Billions” (BloombergTechnology.com). licensing has been the biggest expense so far. It's actually quite simple: the more you click on a song, the more the company will have to pay. In February 2017, a single ad-supported stream was able to generate $0.00014123. on the streaming service" (digitalmusicnews.com). This means the artist would earn approximately $100 in mechanical royalties after 703,581 streams. One way Spotify has managed to gain popularity is through ad placement. This year they unveiled a follow-up campaign from Weiden and Kennedy New York, which again analyzes listener data, but this time with an eye on unusually named playlists. Out of Home placements will run for six weeks in San Francisco, Los Angeles and New York with creative playlist names like “sorry, I lost your cat” and “I don't know how to make a playlist.” This campaign, however, takes it a step further by posting three videos online featuring musical artists such as Alessia cara, DNCE and DRAM, who marvel at the inclusion of their songs in strangely named playlists which are then portrayed in absurd ways. By putting users at the center of your ads and celebrating their uniqueness, you can show users how to transform this platform into what they want. With this campaign they have the ability to progress towards better things. Beyond this, Spotify is strengthening its internal creative team to fuel the brand's early investments using traditional channels such as TV and outdoor to reach broader audiences. There are currently no industries where distribution channels do not generate profits. Partnering with the likes of Def Jam and actor Tom Robbins, the brand is developing shows rooted in music and pop culture, attracting more users. It all amounts to Spotify future-proofing its business rather than patching up the cracks. Please note: this is just an example. Get a custom paper from our expert writers now. Get a Custom Essay Despite the pressure, “the streaming service boasts more than 100 million active users and nearly two million more every month” (thedrum.com). These users are then slowly converted into paying customers. “People come to Spotify with a clear idea of ​​what we offer and what they want to buy,” explained Seth Farben, head of marketing at Spotify. “When you're a company that has early adopters or die-hard music fans, you choose a system that they are more familiar. Spotify, as a company, needs to make sure it communicates well and doesn't have to listen all the time to get any benefit." Overall, Spotify's ability to acquire customers is amazing. Many of them have listened to them and will listen to them for many years to come. Works Cited Spotify. (n.d.). Retrieved from https://www.spotify.com/IFPI Global Music Report 2015. (2015). Music business around the world. Retrieved from https://www.musicbusinessworldwide.com/wp-content/uploads/2015/04/Global-Music-Report-2015.pdfBillboard Staff. (2012). Spotify launches a campaign-80