September 03, 2019

Spotify, beware consumerized thinking.

18 minutes

We’re tackling another big name in this week’s episode of Tradeoffs — music and audio content streaming provider Spotify. Hiten and I sit down to talk through Spotify’s successes and think about what they need to do to maintain their leading position in the market. It’s an interesting topic as, until now, Spotify’s maintained a singular focus on music discovery as their core value proposition.

The Tradeoffs

Even though listeners have a myriad of listening choices, 42% of them don’t actually engage with the product every day. Spotify needs to find ways to pull in those users and increase engagement without alienating their core customer base.

Freemium acquisition built a huge base of users who are monetized through ads. There are additional revenue opportunities outside of music streaming and discovery that can convert these users but will require Spotify to move away from consumerized thinking.

Spotify is known as one of the top curators of music and audio content. Much like Netflix has already done, they’ll need to differentiate their brand with original content as new niche streaming services flood the market. This will require changing how they think about commoditizing their product.

This is a ProfitWell Recur production—the first media network dedicated entirely to the SaaS and subscription space.

...more