Looking critically at the Spotify brand
Spotify is changing the way we listen to music
The Spotify brand is an interesting case study on an emerging technology. At Stealing Share, we deeply appreciate companies seeking to be different and better than their competition. Regardless of the category or its size, businesses always have the capacity to be unique. They have the ability to fully embrace their customers. And, perhaps over time, their particular customers may come to covet them and form a cemented brand.
We’ve chosen to take a critical look at the Spotify brand. Spotify is taking a wise approach to the streaming music experience. Will it be a iTunes killer? Well, we’re not taking things quite that far yet. But we do believe with the right approach, the Spotify brand could become the best streaming music site on the web.
What is the Spotify brand?
Much like streaming music sites like Rhapsody, Napster or Pandora, the Swedish born “Spotify is a DRM-based music streaming service offering streaming of selected music from a range of major and independent record labels, including Sony, EMI, Warner Music Group, and Universal.”
Just recently released in the United States, the Spotify brand has an amazing wealth of music that users can access through a plethora of technological vehicles. For example, you can easily log into the Spotify system from your computer and use its internet-based interface. It’s reminiscent of iTunes. In fact, you can upload the entirety of your music catalog to the Spotify interface, thus enabling you to completely forgo iTunes, should you wish. Or, you can to access Spotify from a phone or tablet, Spotify has an app so you can access the service anywhere.
What Spotify entails
As stated in the company’s description, Spotify works hand-in-hand with both a diverse and large group of indispensable music labels, offering users a sizable database to choose from. However, it’s unlike the trendsetter iTunes, a music store where one has to pay $.99 to own a song or $7.99 and up per album, Spotify offers monthly memberships of only ten dollars. With this membership-based program, users stream any and as many songs as they wish. The only downside is these songs and albums are not yours to keep. Spotify is more like a library, where as long as you pay your membership, you can keep your books for as long as you like. Additionally, full albums and user created playlists are saved and accessed at anytime. What’s more, music streams at a high bit-rate, giving users a truly vivid sonic experience.
Spotify, at a quick glance, seems more in tune to user preferences than the other music-streaming giant, Pandora. Pandora, for those readers not aware, is a free, streaming, radio service. With Pandora, you log on and select an artist or song you wish to hear. Once established, Pandora selects songs from that chosen artist as well as other similar artists (as specifically selected and categorized by Pandora). Spotify, on the other hand, gives users complete and exacting choice.
With Spotify, users select a song or artist they wish to hear. That very song or artist is played, not an assortment of similar artists. Pandora is more of a crapshoot. But Spotify gives you immediate gratification.
The genesis of Spotify
The Spotify brand did not simply bloom and flower overnight. As stated, Spotify was born overseas in Sweden, where it was launched in 2008.
From the Spotify Blog:
The Spotify application was launched for public access on 7 October 2008. While free accounts still remained available by invitation only in order to manage the growth rate of the service, the launch meant that paid subscriptions were opened to everyone (We’ve only just begun! Spotify AB blog. 7 October 2008.)
The first step towards offering free accounts to the public without an invitation was taken on 10 February 2009, when Spotify opened for free registration in the UK (Spotify now available to everyone in the UK. Spotify blog. 10 February 2009).
Due to a surge in registrations following the release of the Spotify mobile service, Spotify closed its open registrations in the UK for part of 2009, and went back to an invitation-only policy.(https://www.spotify.com/blog/archives/2009/09/10/back-to-invites-for-a-while-in-the-uk/).
Spotify launched its US service in July, 2011. At that juncture, the company was already assessed at one billion dollars. However, that revenue will increase.
What is the Spotify brand?
Whenever analyzing a brand,first consider who customers believes they are when using that specific product. Let’s apply this specific scenario to the Spotify brand.
People who use Spotify are serious about music — and they believe themselves to be serious music listeners. Also, these users are looking for a better alternative to iTunes.
Yet, why would these users think that? Why would Spotify possibly be a better music answer than iTunes? First, using Spotify as a premium user is ultimately cheaper, $10 a month. This is very cheap for the serious music listener. With this small monthly investment, the music aficionado has immediate access to nearly any song they wish (minus a handful of choices) at a high bit rate. (320 kbps, in fact) This, as the Spotify website details is, “some high fidelity.” See, Spotify recognizes that the music lover cares about high fidelity. Moreover, Spotify boasts exclusive content such early album releases.
In a nutshell, the Spotify brand is about convenience and premium music for the serious music listener. The self reflection of its customer is a music aficionado.
What is Spotify doing well?
Spotify did something interesting who it launched in North America. It made its content available only to invited users. By doing so, Spotify created instant intrigue among potential users. To be included in an exclusive club is a human desire. Scarcity is a value.
Additionally, Spotify created a simple way to navigate interface. On whichever device, users can easily import their pre-purchased musical MP3 catalog. Users can also search through an overabundance of albums and songs, and save selected songs and albums as playlists to be accessed at anytime.
For those that care about simplicity, these attributes are highly favorable. And, as our own research has uncovered, people crave simplicity. Over complication is one of the problems with Apple’s streaming option.
What is Spotify doing poorly?
It’s hard to pick apart a company that is doing so much so well. But Spotify is making a few blatant mistakes.
Owning music is important to many. The backbone of a preferred brand is ownership, even if it’s emotional ownership.
While there are hordes of torrent sites and illegal music options, people inherently want to do the right thing and not steal music. Yet, with Spotify, you are only renting music. At some point, you have to give it all back.
This is a problem. It is why similar but less successful sites like Rhapsody, Napster and eMusic have never really competed with iTunes.
Why is that?
People desire to own their personal brand, not rent it. Music is, for many, a major facet in self-identification. As much as having a Spotify’s premium membership is significant, ultimately the music does not belong to the users. The Spotify brand owns it.
What we suggest for Spotify:
Maintain the position of being the music site for music purists:
Spotify is making wise marketing decisions. Solidifying the Spotify brand as a reflection of musical purists is an intelligent move. Such users can appreciate that through Spotify. You can locate intimate concert recordings, as well as standard EP and LP studio recordings. By Spotify keeps the music junkies of the world satiated by having many options.
Don’t try to be the next iTunes:
Spotify, please remember this mantra. You will never beat the market leader by doing exactly what it is that the market leader doing. If everything is the same, the market leader becomes the default choice. The Spotify brand must be uniquely different from iTunes, eMusic, Napster, Amazon and Rhapsody to have continued success.
For example, iTunes maintains high audible quality and a song catalog that you must purchase. Spotify has the same high audio quality but it is lacking in interface structure. Enhance it. As of now, saved playlists, albums and artist files are not alphabetized. There is little search ability categorized for any kind of user convenience. A sense of music ownership would be felt for years if Spotify can improve its interface so that it flows with an intuitive and logical sense or order.
In closing, the Spotify brand has the potential for great success. With proper focus and differentiation, it can compete with anyone. More importantly, it can carve a nuanced niche in the DRM-based music service marketplace and find great success in the years to come.
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