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Can Spotify keep the party going?

Can Spotify keep the party going? Can Spotify keep the party going? Can Spotify keep the party going? Can Spotify keep the party going?
12/21/15
1/4
by Rick Leech
The way we consume and share music has come a long way in the last 20 years. From the walkman and mixtapes in the ‘80s to burning CDs in the ‘90s and the advent of the digital age in the new millennium, technology has altered the ways we access our favorite jams. In the last 5 or so years, we’ve seen yet another shift in the rapidly-evolving music industry with the rise of streaming and internet radio services. Freemium and Pay-Subscription services like Pandora, Grooveshark, Spotify, and iTunes have all gained popularity in recent years as more and more people turn to the internet to discover new musical content. But how do these services stack up against one another in an increasingly competitive space?

Spotify Power Grid

Turning to the BAV PowerGrid, we see that iTunes and Pandora dominate among both the General Population (in grey) and Millennials (in color). Not surprisingly, all internet music services see a large boost in Brand Equity among the Millennial audience, who tend to be more avid consumers of internet-based music. Out of all of these brands, Spotify sees the greatest gains in Brand Equity among Millennials, who use the service nearly twice as much as the general population.

Spotify Pillar Pattern

Examining the Pillars that underlie the BAV PowerGrid structure, we see that while Spotify remains just as highly differentiated as the category to Millennials, the brand is not as Relevant or Esteemed as the category, especially when compared to competitors like iTunes and Pandora. Despite this, Spotify is still in an excellent position to grow its Brand Equity among Millennials, who consider it to be a leadership brand. Millennials also uniquely perceive Spotify as a simple, friendly, and customer-centric brand that is constantly innovating the music industry. They have similar perceptions of brands like Yelp, Starbucks, Netflix, and Kickstarter—all of which continue to innovate their respective fields while still exuding a simple and friendly brand image.

Spotify Brand Board

So what does this all mean for Spotify? In the past few months, the internet music category has seen multiple new developments, with Beats Music being taken over by Apple and spinning off Apple Music and Last.fm ditching their streaming radio option in favor of integration with Spotify and YouTube. Bringing last.fm’s “scrobbling” technology to their services is one way to maintain differentiation in this crowded field, and Spotify continues its innovation streak, rolling out playlists based on listeners’ tastes and those of users similar to them and cranking out playlists customized for parties that seamlessly flow between songs with similar tempos, beats, and moods. As more and more consumers turn to streaming services like Spotify and Apple Music, they’ll come to demand innovation and customization in their listening experiences—And Spotify is poised to step up to the plate and deliver in a simple way.

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