Why Spotify is favored more than other DSP’S

https://www.highsnobiety.com/2016/09/13/apple-music-tidal-spotify/

The modern world of music consumption nowadays is unlimited. Mainly powered by digital service providers such as Apple Music, Spotify, Tidal etc. or even self-managed music retailers such as Soundcloud and Bandcamp, the choices of listening to one’s favorite tunes are endless and is almost accessible anywhere with an electronic device. Among consumers, there is a division as to which digital service provider is better between the two most used platforms: Spotify and Apple Music. In this research based on college students and further outside sources, it is found that Spotify is more favored and used by consumers due to it’s “freemium” option, extremely, handpicked, curated playlists and the social media ability to connect/analyze fellow peer’s music consumption within the platform. In regards to the platform’s stance in the future of the music business, it will still uphold its high favor to the general consumer while hopefully fixing its underlying financial issues in regards to the artists themselves. Spotify is so far the top leading platform when it comes to modern day, music consumption due to its distinctive qualities other competitors may not carry.

Spotify is a digital-streaming service platform that was initially created in 2006 but then launched to the public in the year of 2008. Their founders are Daniel Ek and Martin Lorentzon. This service allows users to listen to any track without download, but straight from Spotify’s “cloud” of music. Hence, why the seamless, easy access to listen to any track was available (Pullen). Spotify also has a “freemium” option, where consumers can listen to any track without charge but in exchange with the time of listening or seeing advertisements in between sessions. However, to get rid of advertisements, unlock exclusive features such as listening offline, endless streaming and the option to download music onto your devices is the monthly payment of $10 for their premium plan. Spotify also offers college students a half price discount in joint with the subscription, on-demand TV service, Hulu which is an efficient way to target/cater younger audiences as they are their main consumers.

Focusing on their statistics according to date, Spotify now has “100 million active users” but “only 30 million out of the 100 million are paid subscribers” (Hall). That may be only 30% out of the whole consumer statistic, but comparing it to its competitor Apple Music, Apple Music only “has 15 million paid subscribers” (Hall) which is a significant half than Spotify’s. The other important side of it all is the pay towards artists. Unfortunately, this is one major downfall Spotify is known for by not paying enough towards their artists. According to Glen Sears on behalf of Quora, the money distribution goes as planned: record labels have a royalty percentage flat in which they get first no matter what, performance rights organizations such as SESAC, ASCAP, and BMI have the same situation and they get paid next, then the streaming services get 15–30% of the revenue and a little more for their “back office services”. The remaining revenue then gets divided by the “total number of service plays” in said month”. The final step is paying the publishers of each composition, then last the artist. That is calculated by multiplying the previous outcome of the last equation by the number of plays again within that said month (Sears). Basically, breaking the revenue due to plays each month by each step with the artist being last to get paid in the process is never fair for them, leaving them less than what they expect. This is a very confusing issue especially if they had a very, high significant amount of plays. However, since experts within music industry, artists and consumers are shedding light on this issue, it is something Spotify should work on in the prospective future for the sake of their business and keeping relations to their artists.

There are many other digital service platforms out there such as Apple Music, Tidal, Soundcloud and Bandcamp in comparison to Spotify, but do they hold the same features and user experience as Spotify? One thing is Spotify’s ability to have a social networking aspect in their platform. One can have their own profile that lists their recently listed artists, their own public playlists created themselves and which artists they’re following. There is also an option where one can follow other listeners, and look upon the “Friend Activity” sidebar to see what they’re listening to, even live if they’re on at the same exact time. Apple Music does not carry that but, one thing similar is the ability to connect with the artists themselves. Spotify also has a “freemium” option and the option for a monthly service fee. Tidal and Apple Music only provides a free trial for a certain and limited amount of time, but however, when that trial period is over, they do not have a “freemium” option. One would have to continue to pay in order to use the service. That could be an issue for these platforms because there could be consumers out there who do not mind the limits of what Spotify’s “freemium” offers, meaning Apple Music and Tidal miss out on those potential users. Spotify also creates curated playlists which allow consumers to discover new artists. Services such as Bandcamp, however, do not have that seamless, easy accessible display to find new artists, yet rather having to search within filters and clicking through numerous of pages which is difficult for consumers since nowadays so many people love easy access. Bandcamp does not have playlist features either, rather it’s catered towards being a retail outlet rather than a streaming, listening platform. On the other hand, given, Soundcloud does have similar features as to Spotify, including the social media integration within the site which gives listeners and artists the option to follow one another and repost tracks. Soundcloud does have playlists created by users but not curated ones like Spotify does so specifically.

In most recent times, Soundcloud came out with Soundcloud Go which is to compete with platforms such as Spotify and Apple Music (Heath). This on-demand streaming platform runs for $9.99 a month, which is the same price for almost every other platform out there. The issue with Soundcloud Go in comparison to Spotify is the actual amount of tracks one receives after paying the subscription. According to Alex Heath of Business Insider, one does not actually pay the right amount they account for Soundcloud Go. Soundcloud already has 125 million songs/tracks consumers can listen to for free, however for paying that $9.99, one would only get 15 million more exclusive songs which is not a lot for the price. Going with Spotify premium is still a much better deal because you are paying for additional features, not like Soundcloud Go, where one essentially pays a subscription of just 8% of additional tracks that already exists within a said catalog.

To get actual raw data, I had performed a focus group where there were about 10 students who were asked the following questions based on their digital music consumption habits. This included topics such as if use they use their platform for finding new music or just to listen to their own music, if they listen to curated playlists tailored just for them, how accurate do they think those curated playlists are in reference to their own music catalogs, how often do they use and or find themselves using their platform(s), and overall how do they think their platform is presented based on easy navigation, consumer-friendly and being aesthetically pleasing to the eye. Initially, I believe that I should have asked what platforms do they use prior the questions just to see which one its more popular, but as the answers seem to come along, many of the students kept describing Spotify, while less than half mentioned any other digital service platforms such as Apple Music or Youtube Red. The reasons why these answered were asked in particular was to see any common patterns in college student digital music consumption.

Specifically, the questions target in behalf of the performance of the platform themselves and how they cater towards their young consumers. Starting off a general yet obvious observation, the students were asked how often they find themselves using the platform. 100% of the students answered in the variations of all the time, every single day and daily. Some explain that they always use their platforms whenever they have free time whether it be commuting to school/work or doing homework. Moving on, the performance-based questions involves by asking if any of the students listen to the curated playlists Apple/Spotify designated employees to specially create. There was an equal amount of yes’s and no’s yet a less amount of Apple Music users than Spotify. This is surprising in comparison to another study done by Allison Ullrich, in which Ullrich found, “I always ask applicants during interviews how they discover new music, and the answer is almost always: Spotify’s Discover Weekly” (Ullrich). which is a popular curated playlist, created upon one’s own music catalog/listening. Going back to my observation, some students answered depending on their occasion. The ones who said yes then further explained they do so to find new music to listen to. The ones who answered no claim that the playlists themselves do not appeal to them, the music selections are always off and never on point. The ones who say they do it on occasion only listen to these playlists when they want new music to listen to, but most of the time they would rather listen to their own music selections. To be more specific in further questions, the students were then asked how accurate do they think these curated playlists are created in reference to their own music listening. Once again, I received the same amount of inaccurate and fairly accurate. According to the data, I could observe there is a significant separation for the ones who like the curated playlists and those who very much dislike it and tend to not use it at all. The last question asked was an overall belief on how they believe their platform is presented depending on aesthetic, easy/seamless navigation and user-friendliness. Majority of the students answered that they believe most of the platforms are overall easy for the general public to use while ones who mentioned a few issues mentioned issues such as an older demographic having difficulty in using them. One student mentioned how algorithms used within these platforms to generate song suggestions get bothersome and are disruptive because the same suggestions come up all the time, thus missing out on other tracks that consumers may actually be interested in.

In conclusion with the research, many of the answers given despite being negative or not were spoken on behalf on the use of Spotify. I would say about 20% of the students within the group used Apple Music or another platform such as Youtube as their source of music. Another point I conclude is there is about an even divide whether the curated playlists benefit consumers or is simply a feature they do not even bother to touch. Overall, platforms, specifically Spotify are very easy to use, user-friendly and extremely seamless to find and listen to one’s own music. Spotify’s “freemium” option, handpicked playlists, social media integration provides a whole new innovative experience for music consumers in the modern world today.

Touching on the stance of Spotify’s future, we can see that Spotify is reaching out to its specific demographics, such as U.S college students by the launching of partnering with Hulu in the beginning of September 2017. This provides the ultimate all in one entertainment package, heavily catered towards college students while been released at the start of the school season. Spotify has also created newer playlist categories that may be in favor old the older demographic by providing a playlist called “Your Time Capsule” which includes predicted tracks one may have listened to in their early teenage years. Having heard sources by ear, many of the older generation says it’s quite scary accurate yet extremely interesting at the same time due to that nostalgic vibe. Spotify has recently been working on “voice control” integration which is driver friendly to those who commute to school, work or home.

Their actions reflect on how they think of their diverse consumer demographic, and how will it not only benefit the platform itself but it’s listeners, providing safe, unique experiences for everyone involved. Spotify will still be strong in the future in the music business as for there is no other option to replace on-demand platform streaming for the next decade or so, hopefully integrating new, innovative features it already as to offer.

Works Cited: http:hyperurl.co/rjnrne

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