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Platform Business Model of Spotify
Customer
Value received from
others
– $ in bold
Value received from
Platform
– $ in bold
Value provided to
other customers
– $ in bold
Premium Paid subscribers
/Listeners / Users
-Advertisement-free
Music Content (Artist)
-Advertisement- free
Premium Streaming
access to content
-Play lists
Interactions (Users)
-Audience (Users)
-$ Content (Artists)
Primary Payer –Main
source of revenue
-Free Streaming
access to content
-Play lists
Interactions (Users)
-Audience (Users)
-$ Content (Artists)
Sweetener
-Playlists (Users)
Free-subscribers /
Listeners / Users
-Music Content (Artists)
-Playlists (Users)
Advertisers /
Brands
Artists / Content
creators /
Podcasters/
Record labels
-Audience, promoting
their brand
(Both type of Users)
-$ Audience- Streaming
(Users)
-Reach the right
audience
-Engage wide range
of audience around
the world
Value provided to
Platform
– $ in bold
Customers they
attract
Profile
Payer
N/A
-Audio Content
(Artists)
Linchpin
1
Spotify Customer Dynamics
Student Name
Professor
Course
Date
2
Spotify Customer Dynamics
5. Spotify, as a platform, generates a considerable amount of revenue from various client
demographics. First and foremost, a significant portion of Spotify’s income comes from individual
users who pay for premium services (Vonderau, 2019). These users receive ad-free music
streaming and frequently choose premium subscription plans, directly boosting the platform’s
income. Also, Spotify gives its marketers access to a sizable audience, opening up a new revenue
stream. Additionally, musicians and content producers increase the platform’s financial value
because they receive royalties based on the number of listens, which encourages them to keep
creating content only for Spotify. Last but not least, Spotify gains from app developers that build
different plugins and integrations within the system, improving the user experience and, as a result,
boosting user retention and income.
6. Certain demographics are drawn to Spotify by each sort of user. Artists, bands, and
podcasters are the main demographics drawn by individual subscribers who pay for premium
services (Chatsri, 2021). These content producers perceive Spotify as a successful platform to
reach a global audience with their work. High-quality material also draws listeners who are
interested in various podcasts and music genres. Additionally, Spotify’s large user base attracts
advertisers because it enables them to target particular demographics based on users’ musical
choices and listening patterns. Ads are likely to reach the proper audience thanks to the exact
targeting, which increases their impact. Innovating music-related apps like playlist makers and
music analysis tools that respond to the interests and preferences of music lovers are also attracted
to Spotify by app developers, further enhancing the user experience.
7. Based on their jobs and contributions to the platform, Spotify’s user base may be clearly
described. Individual customers are Spotify’s main source of income because they pay for premium
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services, providing the bulk of the company’s revenue in the form of subscription fees. By funding
specialized advertising campaigns, advertisers act as payers and help Spotify’s revenue stream. By
producing great content that draws paying members and advertisers, artists and content creators
serve as sweeteners, indirectly boosting revenue through higher user engagement. Additionally,
app developers serve as secondary sweeteners by developing distinctive programs that improve
the user experience and, by keeping users, indirectly boost income. This particular breakdown
emphasizes the distinctive roles played by each client category within the Spotify ecosystem,
emphasizing their contributions and significance to the platform’s success.
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References
Chatsri, T. (2021). Strategic marketing analysis: a case study of Spotify.
Vonderau, P. (2019). The Spotify effect: Digital distribution and financial growth. Television &
New Media, 20(1), 3-19.
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