Spotify: Face the Music

  • Reference: SM-1613-E

  • Year: 2014

  • Number of pages: 21

  • Geographic Setting: Estados Unidos, Global

  • Publication Date: Dec 9, 2014

  • Source: IESE (España)

  • Type of Document: Case

  • Company: 400 million in 2012

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Description

The case describes the business model of Spotify, setting it against the backdrop of a music industry that has faced steep revenue declines since the advent of digital formats in the late 1990s and the rise of illegal file sharing. The case also presents the competition Spotify is facing from the likes of Pandora, Google and Apple and eventually poses the question of whether Spotify has a viable long-term business model despite explosive user and revenue growth as of 2014. The case also considers whether Spotify's model could eventually return the industry to a path of global growth, as has occurred in some of the markets the company has entered.

Learning Objective

The case is written from a strategic management standpoint. It aims to discuss the evolution of the music industry's value chain and Spotify's value proposition. The main focus is on whether the company has strategic advantages over the competition and, if so, whether these could be lost or protected.

Keywords

Business model Competition Competitive advantage Competitive strategy Digital goods Digital media Entertainment industry Music industry Value chain