Monday, January 9, 2017

Spotify and Other Music Streaming Services

Spotify and Other Music Streaming Services
Cassie Doubek

Music streaming services have become increasingly popular as more and more users prefer the unlimited access to new music these services provide. Spotify is one of these sites that has skyrocketed into success over the last few years. With over 100 million total users as of June 2016 and 40 million paying subscribers as of September 2016 (see the graph below) Spotify encourages users to upgrade to Spotify Premium for $10/month, a platform where it continues to differentiate itself from other music streaming sites.







   
With Spotify Premium the negative externality of advertisements every few songs is eliminated and sound quality is improved. Premium also unlocks new features including unlimited skips and song choice (you are no longer forced to listen through shuffle mode). You can also listen offline meaning you can listen anywhere without using data which gives it an advantage over competitors like Pandora. Spotify also offers a discounted student package at $5/month and family package for $15/month for family use of up to five people. The graph below emphasizes how these features result in more success over other streaming sites such as Apple Music.








With all the unmatched features and discounted prices, it is easy to see why Spotify has continued to increase its user base. The upgrade to Spotify Premium will provide music-lovers with many benefits that outweigh the cost of the monthly subscription fee.

Works Cited

Stegner, Ben. "Is It Worth Upgrading to Spotify Premium?" MakeUseOf. N.p., 20 July 2016. Web. 05 Jan. 2017.

McIntyre, Hugh. "With 30 Million Users, Spotify Is Gaining Subscribers Faster And Faster." Forbes. Forbes Magazine, 21 Mar. 2016. Web. 05 Jan. 2017.

"Spotify now has 100M users, but only twice as many paid customers as Apple Music." 9to5Mac. N.p., 20 June 2016. Web. 07 Jan. 2017.

26 comments:

  1. One of the negative externalities, is definitely the ads which is a marketing tool to encourage the purchasing of the premium spotify, however there are some who are able to deal with these ads. However some also aren't able to purchase these so they are forced to deal with the ads and poorer sound quality. There are many advantages to using spotify premium, but there are some people who are forced to suffer through the ads and limited skips. In all, there are many music sites that are all starting to force consumers to pay for the service/good they are providing and soon there will be no choice but for consumers to pay again for music listening abilities.

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    1. Everyone I love to listen to the music online that’s why many people make their playlist of their favorites song on the online music streaming services like Amazon, iTunes, Google music etc. The llossless music streaming will help us to listen to our favorite’s song music from anywhere.

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  2. I agree that the main negative externality is the advertisements. It is smart and strategic for companies to use ads, and use them as an incentive to convince people to upgrade and pay money. Spotify premium offers a very reasonable monthly cost of $5 for students in order to eliminate advertisements, which helps to meet the consumer tastes and demands of the primary consumers which are typically younger people. This generation is willing to pay the extra money so that we can listen to our favorite songs whenever we want without the annoyance of ads and poor sound quality. There are trade-offs to upgrading (no ads, high sound quality) and trade-offs for not upgrading (saving your money). Companies like Pandora and Spotify are smart about their strategies because they are still managing to please all of their customers by providing free music, but also making profit at the same time by offering luxurious incentives to paying relatively low costs.

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  3. Music streaming is a luxury now a days as I can choose from thousands of songs and listen to what I want whenever I want. Although, I agree that a negative externality is the advertisements the benefit of having that much music at you fingertips outweighs that downfall. With that being said there has been a lot of competition between companies to try to promote their different types of music services. For example there is not only Spotify and Pandora. There is also Tidal and Apple Music that are other services that allow you to listen to what you want when you want.

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  4. The music industry has seen major changes in the past few years that has changed how and what we listen to. The new apps that are on the markets all have their unique benefits to them, but they all also have an opportunity cost to go along with them. Whether it is an advertisement on Pandora or traditional Spotify or a monthly fee associated with Spotify Premium they all have some sort of cost. Additionally, the music companies that provide music streaming service and or purchase are in major competition in their oligopolic market. Each service is looking for their niche, and Apple found the right idea my purchasing the rights to be only supplier of Taylor Swift music making them a monopoly when it comes to the music that she creates. Many of these apps and services that are on the market today were not around five years ago so it will be interesting to see what the music industry transforms into five years from now.

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  5. I agree with your points. The advertisements are a great way to provide incentives for people to switch and also the offline listening lets users use less data saving money that way. It's clear that for music lovers spotify is a great source for easy streaming even with all the other outlets to choose from. To add, I would also like to thank you for telling me there is a student discount which I haven't been using.

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  6. With rampant pirating of music, it seems that Spotify may have saved the music industry from a slow death in eternal pirating. In fact, it was probably pirating that brought Spotify and other similar streaming systems into existence, as those sites offered "free" and more convenient methods of music listening. Additionally, it seems that Spotify can help to expand the music industry by sharing lesser-known artists on a widespread platform, which creates a positive feedback loop that always reciprocates.

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  7. Although the ads are a negative externality and it takes data, I still think that spotify is a great alternative in comparison to something like pandora. As the numbers show, other people must think the same thing. I think that the advantages that premium gives will also keep the number of subscribers growing more and more every year.

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  8. Music is one of the largest industries in the U.S. and is always changing. Spotify has changed the way we listen to music, being able to stream for free, at the cost of listening to ads every once and a while. For the some the time cost of listening to ads is too much, so they buy premium to get rid of ads.

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  9. The music Industry is in a very precarious position, with the rise of the internet age, we see a rise in pirating music and other forms of media, but with this there are new opportunities for growth in new ways, and because of this the music industry needs to find new ways to make profit. Without this it may suffer a slow and painful death. Though ads there is new ways to make profits, and maintain “free” music, without this the music industry would not be profitable.

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  10. Spotify offers a comparative advantage over other music streaming companies because it expands on the services of its competitors. Particularly offline streaming alleviates data-usage concerns of many subscribers, so they can feel like they are still saving money or data even though they are paying for the monthly subscription. Although the premium subscription is better than standard Spotify, many users would not find the difference great enough to pay for the slightly better service if the cost was high, so it is probably in Spotify's best interest to keep the premium prices low.

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  11. It is smart that Spotify offers a free option, then gives the chance to upgrade. As users listen, they can decide how much the opportunity cost of the ads and no song choice is, and decide from there whether it is a good enough trade off to purchase it. I know most people start with the free version first, only to give in an upgrade to get the added benefits. Spotify has done a good job balancing the cost with the added benefits so that many consumers are willing to buy.

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  12. Both Spotify premium and the free Spotify are great ideas for a company especially being an app. With the adds they are still making substantial profit without having their customers pay to use their services. There are many benefits to having premium and another I would like to point out is since it is only $10 a month and Apple Music is either $0.99 or $1.29 per song, someone would only need to listen to 10 new songs a month to make premium worth it. When this is put into perspective the cost of premium is well worth it.

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  13. Spotify's free option is nice, but there are too many ads. They try to make it seem like theres not many ads by saying " Enjoy the next 30 minutes add free, thanks to the following sponsor". But in reality Spotify has the same amount of ads as pandora, another music streaming app. Spotify tries to force people to subscribe to their premium option, with the ridiculous amount of adds it plays. I agree with you that the streaming without using data, is Spotify's main advantage over apps like pandora.

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  14. Spotify has been changing the way we have been listening to music for years. By giving people multiple ways to listen to music, free or with a Premium account, they are a competitive music streaming service compared to others. And the incentives with creating a Premium account, such as no ads when listening to music or the ability to skip songs, have been seen worth spending $10/month. However, Spotify is not the only service that is competitive with Apple Music or Pandora. There are others, such as Tidal, that are starting to change the way we listen to music that contains a cheaper price and benefits that more people want to purchase.

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  15. Spotify is clever in making the app free for general use, but then charging for other benefits. It allows the consumer to decide for themselves how much the opportunity cost of having no ads and better song options is. However, since there is no scarcity in the music business (Pandora, iHeart Radio, etc), it is surprising that spotify is so successful with high premium prices ($10/month).

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  16. Spotify has changed the way many people listen to music, but it does have close competitors. While Spotify might have been the first company to offer "offline" listening, Pandora now also offers an "offline" version when you upgrade to their premium package. Along with this benefit the listener will also receive unlimited skips with ad free listening. Spotify still does have an advantage in that listeners can choose the exact song(s) they want to hear and in what order, while with Pandora you can only choose a genre or similar artist.

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  17. I agree that a disadvantage of the free Spotify accounts are the advertisements however, personally I think the amount of data required to use the app is more of a pain to the consumer. As a business I think it is strategic of them to have a free option unlike streaming services such as Tidal and Apple where the only way to use them is to pay upfront. By allowing upgrades and package deals Spotify becomes more appealing to the consumer and also more profitable as shown in the graph.

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  18. A big disadvantage of Spotify is not being able to listen to whatever song you want to. If you log onto YouTube, you can pull up any song at any time for free, which is a big advantage. That's why Spotify premium is very appealing to users, because we all want to have things instantly. Personally, I pay for Spotify premium myself and I think it's worth the $10 because I listen to music for at least 4 hours a day, and being able to pick specific songs and not use data in the car and at the gym is important to me.

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  19. Spotify is one of the most well known music streaming services and has further developed the way individuals have been listening to music. For non-premium users, once and a while, listeners are provided with an ad that allows them to listen to music without ads for 30 minutes. Other music streaming services do not provide non-paying listeners this benefit. For an example, Pandora allows non-payers to listen through their service, but are limited to 7 skips per hour. Spotify also has a low price each month to be a premium listener; $10/month or $5/month for students. Other music streaming services such as Apple Music and Tidal do not allow non-payers to be listeners. Spotify provides benefits for both payers and non-payers to make both sides of the consumers content.

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  20. Spotify has definitely risen to the top over the last few years for sure. Like the articles said, its because there are many advantages to the Spotify streaming service. From no ads, to downloading music so you can listen offline all the way to choosing your own songs instead of shuffle, it surely looks like a great option. I think another reason why Spotify will stay on top is because of pricing. To have the option to pay as a student or family is so critical to the majority of users. This saves money for the consumer while still receiving the same high quality streaming service. Until the other competitors can even match or surpass Spotify, it will remain at the top.

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  21. I do agree with your post that spotify has become more popular. Some people do complain about the pricing of the app for premium but in the long run it is a better deal because downloading music off of itunes is 1.29 per song. With spotify premium you can download hundreds of songs a months. Having a student discount is something that will draw more customers to want premium especially because many high school and college students listen to music daily.

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  22. Spotify is an incredibly convenient platform to listen to music on. Instead of paying for an individual song or album like on Apple Music, Spotify users are able to listen to a vast range of music for free. However, using Spotify's free version comes with some drawbacks, such as ads, a limited number of skips, and only being able to listen through shuffle. Spotify has a $10/month premium option that is enticing to those who are unwilling to deal with the limits of the free version, which is a strategic way for the company to make money. Having the option to upgrade to premium is a smart business decision, as it gives consumers the freedom to listen how they want and in turn attracts more users to the platform.

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  23. I really enjoy this topic of discussion. As an avid music listener myself I had to make the decision to either go with Spotify or Apple Music. I went with Apple Music and here's why. I pay $10 a month which is the same as most Spotify users. I am able to listen to music offline as well. Here is where Apple Music differentiates from other music streaming platforms like Spotify. Artist prefer to release music on refined platforms like Apple Music. Not that Spotify isn't refined however do you remember 3 or so years ago when Grooveshark got shutdown because of copyright issues? If it came down to it which platform do you would be more likely to make a mistake?

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  24. A big disadvantage of Spotify is that it is limited to just music. Personally, I use Amazon music which comes with Amazon prime. For a student this is just $5 a month and is not limited to just music. Amazon has included free two day shipping, free movies, discounted prices on Amazon, and of course their music which can also be streamed offline. There are many competitors for the music streaming market and companies are started to have to step up in order to compete.

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