SM-1613-E

March 20, 2018 | Author: Kateryna Krasnoshchok | Category: Spotify, I Tunes, Music Industry, You Tube, Royalty Payment
Share
Report this link


Comments



Description

SM-1613-EDecember 2014 Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU After sampling some of the new music releases of early 2014, Daniel Ek closed his Spotify session. Soon, millions of Spotify users would learn he had just listened to Kanye West’s “Atmosphere,” as the profile of Spotify’s CEO was one every new Spotify account followed by default. Some users might be curious enough to click and listen to the album, share it on Facebook, or include one of its songs in a virtual mixed tape that could be posted online. The company was proud of the social features of Spotify’s client software, which had probably played an important role in the tremendous growth the service had enjoyed since its launch back in 2008. But Spotify was making lots of other noise; the company had just secured a $200 million credit facility, and despite the company’s efforts to avoid the issue, the media was full with speculation that the company was about to go public.i And why not? After all, Spotify was one of the leading music streaming services in the world. It had over 24 million users, of which six million paid a monthly fee for Spotify’s premium services.ii It had just entered the difficult U.S. market with great success, and it was already present in 56 markets. Spotify’s catalog contained more than 20 million songs, including the libraries of all major recording labels. Yet Ek knew that not everything was so favorable. Spotify posted a net loss of €58.7 million in 2012,iii the red ink growing alongside its user base. Despite that, some artists protested the low rates that, according to them, Spotify paid to the creators of the music it played. Worryingly, tech behemoths like Google and Apple were entering the market with their own music streaming services. And some analysts pointed at how other companies offering streaming music, like Rhapsody, had not been successful in the past. If Spotify was going to IPO, Ek needed to convince potential investors that Spotify had a sound long-term business model. Many other music streaming services had failed before, and despite Spotify’s impressive growth, some believed it could go on to become yet another casualty in the troubled history of digital music. This case was prepared by Professor Govert Vroom, and Isaac Sastre Boquet, case writer, as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. December 2014. Copyright © 2014 IESE. To order copies contact IESE Publishing via www.iesep.com. Alternatively, write to [email protected], send a fax to +34 932 534 343 or call +34 932 536 558. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise – without the permission of IESE. Last edited: 12/9/14 case centre Distributed by The Case Centre www.thecasecentre.org All rights reserved North America t +1 781 239 5884 f +1 781 239 5885 e [email protected] Rest of the world t +44 (0)1234 750903 f +44 (0)1234 751125 e [email protected] 1 Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015, at Universitat Wien. Taught by Dr Steffen Keck, from 1-May-2015 to 3-May-2015. Order ref F249634. Usage permitted only within these parameters otherwise contact [email protected] Spotify: Face the Music SM-1613-E Spotify: Face the Music The History of Digital Music At first glance, one might say the advent of digital music had been bad news for the music industry. From a peak of $38 billion in global revenues as of 1999, it had fallen to $16.5 billion in 2013, when digital was already bringing in the majority of revenue.iv The industry, in general, blamed piracy for these lost sales,v but Daniel Ek had his own opinion of what had happened: “I realized convenience quite often wins... It’s not that people don’t want to pay for music. [...] It was the only point in time when the stolen product has been much, much better than the one you legally acquired... For me it was a pretty big given why we ended up vi where we ended up in the music industry.” Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU The United States was the world’s leading market, providing 30% of the income of the global recording industry. U.S. companies dominated most of the worldwide music market and had the world’s most popular bands under contract. Thus, the United States became the place where most of the developments in digital music would take place. One of the most notorious events in this story befell on July 27, 2001, at the Northern California District Court in San Francisco. vii In one corner sat the Recording Industry Association of America (RIAA) – the trade association representing the interests of the record labels and music distributors in the United States. On the other side was Napster, the company that in 1999 had launched a service that allowed users to search and download music files for free. In just two years Napster had amassed 60 million users, who shared songs without paying artists or labels.viii Three developments had made Napster possible: 2 – MP3 compression technology. In 1993 the Moving Picture Experts Group – the expert group tasked with setting the standards for digital audio and video formats – published the MPEG-1 Layer III standard for digital audio, commonly known as “MP3.” The MP3 standard reduced the size of a music file by an order of 10, while keeping a quality that was nearly undistinguishable from larger, lossless formats on all but high-end playing devices.ix The result was that users could “rip” their audio CDs, store their entire record collection on their computers, and easily share it with friends. – The rise of the Internet. The Internet was opened to commercial operators in the early1990s, and, in 2000, 43% of the U.S. population already had access to it, a percentage that rose throughout the years and reached 81% in 2012. x At first, most Internet connections were slow, and several minutes were needed to download a single music track. However, soon faster connections were developed and offered by Internet service providers. These so-called “broadband” connections would eventually allow instant play of music tracks and videos. In 2013, it was estimated that 390 million of these connections existed in the United States alone, more than the entire population of the country.xi IESE Business School-University of Navarra Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015, at Universitat Wien. Taught by Dr Steffen Keck, from 1-May-2015 to 3-May-2015. Order ref F249634. Usage permitted only within these parameters otherwise contact [email protected] The Digital Medium and the Rise of Music Piracy Besides suing makers and users of music sharing networks similar to Napster. Later. from 1-May-2015 to 3-May-2015. and BMG – and PressPlay – backed by Sony and Universal.xii Despite the music industry’s efforts to stop them. In the early 2000s. For example. it didn’t allow songs to be copied to portable music devices. in 2014 most leading digital music services had libraries of 20-25 million tracks. MP3. The reaction of the major labels to the new technology was initially litigious. Usage permitted only within these parameters otherwise contact info@thecasecentre. By way of comparison.xv On the other hand. genre. The First Steps of the Industry The first companies that marketed digital music usually lacked the backing of the recording industry. the massive adoption of smartphones would further increase the user base and capabilities of devices able to play digital music.000 to those who paid a monthly subscription. The industry would have to figure out what to do with it. eMusic was still operating in 2014. a typical portable digital music player was eventually able to contain the user’s entire music collection. Both services had several limitations that made them unpopular with users. allowing customers to download a fixed number of tracks for a set monthly fee. the first commercially successful portable MP3 player.com was offering unsigned artists the chance to distribute their music through its website. which made it impossible to shut them down. xvii MusicNet and PressPlay relied on a subscription model and. these players possessed features and usability that were unheard of in older technologies. only artists from independent labels were available. For example. They could then create playlists with their favorite tracks and easily move music between the player and their computers. and every downloaded song “expired” at the end of the month and had to be downloaded again. The genie was out of the bottle. its users were swapping more than 165 million songs per day. and others. Taught by Dr Steffen Keck. These new digital formats spurred the development of a wide range of software and devices capable of creating and playing digital music files. These networks removed the need for a centralized database hosted in a physical location. Warner. paying them according to the amount of downloads accrued. Torrent. if IESE Business School-University of Navarra 3 . Portable digital players quickly became very popular. Users could easily browse and play any song and could store and display information like song title. etc.org Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU – SM-1613-E When Judge Marilyn Hal Patel finally ordered an injunction of Napster. PressPlay only allowed two songs from the same artist to be downloaded each month. Kazaa. band.Spotify: Face the Music New devices. All in all.xiii However. These devices had greater capabilities than the older analog or CD player technologies allowed. Likewise. the first attempts from major labels to enter the digital market showcased the industry’s wariness of the new technology. further sharing networks would emerge: Gnutella. they also tried –but failed – to obtain an injunction to prevent the sale of the Rio PMP300. in 2001 MP3.com eventually shut down and sold some of its assets – including its coveted domain name – to CNET Networks in 2003. as opposed to just the 60-90 minutes of a typical CD or tape. Order ref F249634.xiv Both companies would change ownership and business models in the following years.xvi Indeed. For example. Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. eMule. two joint ventures backed by the major recording labels were launched: MusicNet – supported by EMI. in 2000 eMusic launched a service offering unlimited track downloads from a library of 125. at Universitat Wien. At launch.xxiv Initially. which carried big margins for the company.”xx . Order ref F249634.com as the basis for a new service: Real One Rhapsody (later shortened to Rhapsody).000 tracks.xxviii However. but support for Windows was added a few months later. at Universitat Wien. RealNetworks’ protocols allowed users to see videos and listen to audio without downloading them to their computer. the tracks became unplayable.000 songs. longstanding Apple rival Microsoft launched Zune Marketplace in 2006.xxv By the end of the year. and the catalog had expanded to 26 million. with backing from major and independent labels. RealNetworks acquired Listen. Sony launched the Sony Connect Music Store in June 2004. Usage permitted only within these parameters otherwise contact [email protected] Both Music Net and Press play were jointly placed at number nine on PC World’s list of the “Worst tech products of all time. however. xxxi These stores were not as successful as 4 IESE Business School-University of Navarra Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. but Rhapsody offered the option of paying an extra $0.79 per track to burn them on a CDxxi. they drove sales of iPods. iTunes was only available for Mac computers. Rhapsody was spun off from Real Networks in February 2010.000 subscribers in 2009. and by 2013 its customers had already downloaded 25 billion tracks. a company that had thrived in the 90s developing video and audio streaming technologies for the fledging Internet.xxix On the heels of iTunes’ success. MusicNet and PressPlay only had the music of the labels that backed them. in order to help the parent company achieve profitabilityxxii. Taught by Dr Steffen Keck. iTunes offered a catalog of 200. and analysts at the time doubted its ability to compete with other music services that weren’t using a streaming model. several companies replicated its model for selling digital music.org Soon the labels abandoned these services.SM-1613-E Spotify: Face the Music terminated. merging with the Napster brand for the latter’s re launch as a legal service. making downloading a digital copy of a song a two-step process. MusicNet was sold in 2005xviii and Press Play was sold in 2003.xxvi The service would grow explosively. In April 2003.95 fee for the ability to stream an unlimited number of songs from a library of 330. Apple long claimed that iTunes’ music sales didn’t provide significant profits to the company. it reached 800. didn’t have to wait long for its first massively popular digital music service. xxx Likewise. For example. growth slowed down and ultimately declined. it had already sold 25 million tracks. including artists signed to all major labels. so users needed to purchase two separate subscriptions if they wanted to listen to all major artists. In 2013 the now independent Rhapsody acquired Napster. from 1-May-2015 to 3-May-2015. Furthermore. which were sold at $0.99 per track. Steve Jobs unveiled the iTunes Store during his keynote speech at Apple’s Music Event.000 subscribers. in 2010 it had lost 100. Rhapsody was better received than MusicNet. The Success of the iTunes Model The industry. However. Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU Rhapsody offered a subscription model where users paid a monthly $9. and started using that brand name for most of its business outside North Americaxxiii. selling tracks and albums at the same price as iTunes. In February 2003. xxvii Despite these numbers. greatly expanding the potential customer base. Users could then rip that CD to a computer. One of the allies of the major labels in these failed efforts was RealNetworks. Users couldn’t download the tracks directly to their computers. the high-profile British band Radiohead skipped music labels and released their album “In Rainbows” directly to their fans as a digital download on the band’s website. In consequence. letting customers choose the price they wanted to pay. launched its own digital music store. Usage permitted only within these parameters otherwise contact info@thecasecentre. tracks purchased from iTunes could only be played on up to five devices. labels allowed Amazon to sell tracks without DRM. or iPad could play iTunes tracks. Pandora launched in 2005 and was followed by similar services like Slacker Radio and MOG.Spotify: Face the Music SM-1613-E iTunes. getting revenue through advertising. Taught by Dr Steffen Keck. Attempts like Radiohead’s to upset the usual release process were. Moreover. and the service would attempt to learn their music tastes and play only music that interested them. piecemeal. they also allowed stores to control how tracks could be used. Its “Music Genome Project” analyzed and broke down songs in multiple traits.xxxvi The competition soon followed its path: iTunes. users could then “like” or “dislike” songs that were being played. iPod sales skyrocketed in parallel to iTunes’ success. Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU For example.xxxv Users could buy from Amazon and play the songs on any number of devices that supported the MP3 format. In 2010. Zune customers had to procure themselves a Microsoft-certified device. smartphones became popular.xxxii while Microsoft discontinued the Zune brand and launched Xbox Music in 2012. Amazon was successful and quickly became the second largest digital music store in the United States. as they had done with iTunes.xxxvii Artists too began to experiment with the opportunities that the digital format presented. other streaming services soon appeared. besides a computer. IESE Business School-University of Navarra 5 . Streaming and the Smartphone Era Though it seemed that stores in which users could buy and own digital music had captured most of the market (as opposed to streaming services like Rhapsody). Sony Connect tracks could only be transferred to compatible devices that supported Sony’s ATRAC3 format. Digital Rights Management (DRM) technologies were embedded in the tracks purchased.xl This greatly benefited streaming services.xxxiv Likewise. iTunes and other similar stores still came with a significant restriction.xxxiii Major labels fully backed these and other offerings.org Nevertheless. nearly 300 million smartphones were sold worldwide. Unlike Sony and Microsoft. These limited the number and type of devices these tracks could be used on.xxxix Pandora allowed users to listen to customized “radio stations” for free. iPod. Unlike its competition. however. like the Walkman or the PSP gaming console. abandoned DRM in 2009. in 2007. During the second half of the 2000s. This. reaching 22 million in 2009. Moreover. however. like Microsoft’s own Zune-branded line of players. Meanwhile. including iPods. Order ref F249634. Zunes and Walkmans.xxxviii No sales figures were released. only Apple devices such as the iPhone. changed in late 2007 when a new entrant. ensuring that the customer could not freely distribute the files after purchasing them. Sony Connect closed in 2008. the market leader. at Universitat Wien. online retailing giant Amazon. from 1-May-2015 to 3-May-2015. Smartphones fused the functionality of a portable media player with a computer with Internet connection. which couldn’t be used on regular portable music players as they needed an active Internet connection. For example. allowing users to access Internet music services while on the go. Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. infamous for hosting The Pirate Bay. Spotify lifted that limitation in 2009 in the United Kingdom and proceeded to do the same in most of their markets in the following months. Asia and Oceania. Singapore. and in 2013 the service became available in Italy. Usage permitted only within these parameters otherwise contact [email protected] Spotify kept expanding in the following years: Germany. This time. the largest search engine for downloading illegal music and video content on the Internet. had access to higher quality audio. customers. Spotify only allowed a limited number of users to join their unpaid service. Sweden was. ad-supported version of the service. Instead of throttling free users. Mexico. Taught by Dr Steffen Keck. Spotify finally launched in October 2008 in Sweden and other Western European markets after announcing deals with all major labels plus several independent companies that allowed Spotify to stream their catalog. Spotify offered two service tiers in the United States: free and premium. dwarfing other subscription-based streaming services like Rhapsody. in 2013 Pandora claimed 70 million monthly users in the United States and Canada. Order ref F249634.S. from any computer. Free service users saw their playback interrupted every five songs by a short audio ad – usually promoting music-related merchandise like new records or band tours. Premium users could listen to music without being interrupted by ads. which was rapidly expanding in the U. The company periodically sent out “invites” to their existing users that they could use to invite their friends. subscribers – and six million worldwide. when it already had 10 million users throughout Europe. Australia.SM-1613-E Spotify: Face the Music According to Pandora.xlii Spotify Daniel Ek and Martin Lorentzon founded Spotify in Sweden in 2006 after having both worked in several Scandinavian-based online start-ups. they could enroll in a paid subscription or start using the free. Both tiers allowed on-demand unlimited listening of every song in the Spotify catalog. Europe. and in March 2013 it claimed one million paid U. at Universitat Wien.org One of these streaming services was Spotify. Spotify grew quickly in the United States. and enjoyed other features. Poland. Spotify used a different approach. it offered six months of free premium use to all U. In 2014. the introduction of a smartphone app in 2008 practically doubled their growth overnight. market. 6 IESE Business School-University of Navarra Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. The Spotify Service In 2014. Figure 1 shows the differences between the two service tiers and compares them with Pandora. Lithuania and Iceland. the largest streaming service in the United States in terms of number of users.xliv Spotify launched in the United States in 2011. Paid subscription users were not subjected to this and could join at any time.xliii Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU Initially. . Latvia.S. from 1-May-2015 to 3-May-2015. Honk Kong. Estonia. Afterwards. Portugal. Spotify was available in 56 countries spanning the Americas. ironically. an unlimited number of times.xli Thus. Malaysia. and New Zealand were added in 2012. 99 2 Spotify Connect Monthly fee No No No $0 No 1 Yes Roaming Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU PANDORA Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. Source: Own elaboration.. at Universitat Wien. and browse the most popular tracks and artists of the moment. it was offering a free month of premium service to all new users. resuming the last active playlist. 2 Spotify Connect allowed synchronization between several devices owned by the same user. Free users were not able to select a particular song but could create a “station” that would play random music that followed certain user-provided guidelines (e.org SPOTIFY 1 Max 6 track skips per hour.) Spotify had several social features. access their list of favorite songs and artists. Integration with Facebook and Twitter allowed users to see their friends’ activity and favorite music and artists and generated items about their listening habits on these social IESE Business School-University of Navarra 7 . Spotify’s functionality was simple. bands and other personalities in order to get news about them and be alerted if they released new songs on Spotify. users could “follow” their friends to see what music they were listening to. The radio feature brought several preset thematic radio stations and allowed for the creation of new ones using a variety of guidelines.99 $0 $4.Spotify: Face the Music SM-1613-E Figure 1 Spotify service tiers in the US compared with Pandora (2014) Free Premium Free Premium Mobile Desktop & Tablet All devices All devices All devices Full catalog access Yes Yes Yes Yes Yes Playlists Yes Yes Yes No No Play tracks on demand 1 1 Yes No 14 days 14 days Unlimited No No Ad-free listening No No Yes No Yes Sound quality (kb/s) 128 128 320 128 192 Offline mode No No Yes No No Yes N/A N/A $9. (See Exhibit 1 for several screenshots of the mobile and desktop Spotify clients in 2014. In early 2014. It had also just signed an agreement with mobile carrier Sprint to offer a six-month free trial to all its cell phone service customers. as well as discounted subscription rates. When the user launched the application. Spotify also provided a mobile app that could be installed on Android or iOS devices. music started to play automatically. only premium users could play music on demand with the Spotify mobile application. access their playlists. plus wireless streaming to compatible headphones or speakers. Taught by Dr Steffen Keck. Spotify often ran promotions to try to sign more customers to their subscription services. from 1-May-2015 to 3-May-2015. Spotify also had a “discover” feature that suggested new artists based upon the listening habits of the user. Users could search for any song straight from the home screen. era or artist). genre. Inside the app. They could also follow artists. Usage permitted only within these parameters otherwise contact info@thecasecentre. Notably. xlvi Spotify did little advertising. Order ref F249634.g. This culture enabled Spotify to be agile and react quickly to changes in the environment. The major labels acted as both producers and publishers. A non-customer could click and listen to the playlist but would be asked to register an account with Spotify. from 1-May-2015 to 3-May-2015. All users were also able to save and share their playlists through e-mail. (See Exhibit 2 and 3 for data on the music industry in 2013. promotion. at Universitat Wien.7% Sony Music Entertainment 30. and third-party websites. Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU Spotify promoted autonomy within its structure.net. total revenue from the music industry in the United States – including both physical and digital sales – reached $7 billion.4% Warner Music Group 20. but crosspollination and informal interaction between squads and particular members were strongly encouraged. Usage permitted only within these parameters otherwise contact [email protected]% Others 11. while pushing innovations quickly. “We aim to make mistakes faster than anyone else. served on Spotify’s Board.) Figure 2 Recording industry US market share in 2013 Company name Distribution market share of album sales and track equivalent (10 tracks=1 album) Universal Music Group 37.4% Figures may not add up to 100% due to rounding. discuss and rate them. messaging applications and social networks. There were little formal dependencies between working groups (called “squads”). manufacturing. As Daniel Ek put it. design changes or features. 8 IESE Business School-University of Navarra Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. where they were asked to come up and test new ideas or features.” as shown in Figure 2. founder of Napster and former Facebook president. They could also share songs on Facebook.org Spotify tried to develop even closer integration with Facebook1 and at one point forced users to log onto Spotify using a Facebook account. This was badly received and Spotify soon reversed its plans.net or shareplaylist. Three big distributors dominated the market – the so-called “major labels. Order ref F249634.SM-1613-E Spotify: Face the Music networks. had been set up where users could share. Playlists were a popular feature. in an unrestricted environment. The company even allocated 10% of its employees’ working hours to “hack time”. with the aim of fostering innovation and quick decision-making and implementation of improvements. so their friends could listen to them even if they weren’t a Spotify customer. coordinating and handling recording.”xlvii The Music Industry in the United States in 2013 In 2013. marketing and distribution of music. These 1 Sean Parker. Taught by Dr Steffen Keck. Source: Adapted from Nielsen’s Entertainment and Billboard 2013 Mid-Year Music Industry Report. . such as playlists. with an average selling price of $12. 2011.6 million. horizontallyintegrated media conglomerates.Spotify: Face the Music SM-1613-E larger companies often also acted as publishers of smaller independent companies.2011 Dollars Per Capita Source: Business Insider. The market leader. Universal Music Group. However. from 1973-2009. All the major labels were part of large.xlviii Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. which lacked the capacity to develop effective distribution and marketing arms. IESE Business School-University of Navarra 9 . Taught by Dr Steffen Keck. from 1-May-2015 to 3-May-2015. These records could be purchased at physical stores or bought from online retailers. Order ref F249634.7 billion worldwide in 2013. digital sources of income had been growing throughout the decade. This part of the business had been declining sharply. and in the 2000s high-profile closures or downsizings of famous record store chains like Tower Records and Virgin Megastore had underscored the crisis of the traditional brick and mortar record store. at Universitat Wien. Meanwhile. broken down by format. reported revenues of $6. “These charts explain the real death of the music industry. Figure 3 US Recorded Music Revenue .org Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU The physical recording industry business model was built around the sale of albums that contained usually around 10 music tracks. Figure 3 shows the evolution of music industry revenue expressed as spending per capita in 2011 dollars. This increased the major labels’ market share even further.35 in 2013. and EBITDA of $979. Usage permitted only within these parameters otherwise contact info@thecasecentre.” February 18. they were still not compensating the loss of revenue in the industry’s traditional business. com. While downloading was bringing 40% of the total revenue of the recording industry. Other revenue streams. streaming had been growing rapidly and was now contributing 21% of total revenue. and the number of users kept growing at a frantic pace. when Spotify finally launched in the U. at Universitat Wien.4 billion. the iTunes Store had reported its first sales drop since it began operating in 2003. TV shows. from 1-May-2015 to 3-May-2015. Taught by Dr Steffen Keck. the company didn’t have trouble raising capital. Six years before. 2011. market.26 billion tracks in 2013. The market leader was Apple’s iTunes Store. For example. and overall download sales were down from 2012. Pandora was the market leader in terms of users. In 2012 it had more than doubled its revenue. Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU Digital operations were mainly divided into two types of business: – Download operations sold single tracks or albums digitally. and Xbox Music. while physical sales were dominated by albums. it did so with major music labels taking 18% of its shares. Streaming services usually obtained revenue via paid subscriptions or advertising. Thus. That year.S.org In 2013 digital sales totaled $4. digital and physical customers seemed to display distinct consumer behavior. commercials or videogames.500). the vast majority of digital unit sales were single tracks.xlix Other important players were Amazon. while physical sales of albums and singles were now at $2. typically films. . In 2014 it had successfully completed 6 funding rounds. 2 Synchronization rights were the licensing of music to be used as the soundtrack of an audiovisual output. 2 accrued for less than 5% of the industry revenues. however. and then pay an amount (typically around $1 for a song and $10 for an album) to download it to their computer or portable device. which reported the sale of 1. It was that very same year. Users could select an album or a track.l Amidst this. reportedly raising a total of $537.000 Swedish kronor ($13. unlike download.liv On the face of it. Could the Swedish company be the solution to a shrinking industry?lii Spotify Performance When Spotify launched in 2008. singles not even attaining 1% of unit sales. – Streaming allowed customers to listen to music without downloading it to their device.SM-1613-E Spotify: Face the Music Interestingly. Google Play Music. However. that figure had been just 3%. market. in 2013. in 2011 digital sales had attained a significant milestone in the United States. Spotify’s performance during its short life had been nothing less than impressive.8 million.li It was. a larger slice of a dwindling pie. for a contribution of 100. just 35% of the industry total. Order ref F249634.S. 10 IESE Business School-University of Navarra Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. users never “owned” the tracks. however. listen to a sample. in 2007. since its launch in 2008. like the sale of cell phone ringtones and synchronization rights.liii Spotify’s rapid expansion required significant investment. while Spotify earned the most revenue after only two years in the U. digital sales surpassed physical media for the first time. Usage permitted only within these parameters otherwise contact info@thecasecentre. Furthermore. there was an obvious downside.4 billion. 8 363. The explosive growth of the company had been accompanied by growing losses.5 N/A Depreciation N/A 2. The single largest expense was the cost of goods sold. This consisted mainly of the royalties Spotify paid to rights holders in order to get access to their catalog and offer it to its customers. IESE Business School-University of Navarra 11 . it destined a fixed percentage of its monthly revenue to royalty payments.9 4. at Universitat Wien.8 183.lvi Spotify didn’t pay a fixed quantity “per stream. in 2013 Spotify claimed that 70% of its revenue was being allocated to royalties.2 N/A Operating income -18.4 N/A Other expenses N/A 8. Taught by Dr Steffen Keck. The agreements were valid only for a particular country – since laws and contracts could vary wildly between different countries.7 Subscriptions N/A 52. as the company had secured several rounds of investment. Usage permitted only within these parameters otherwise contact info@thecasecentre. in millions of euros Source: Enders Analysis and casewriters’ own elaboration based on public sources. These payments were made to publishers and master holders depending on the particular agreements that Spotify had in place and any applicable laws of that particular country. lv See Figure 4 for Spotify’s financial data.8 -58.3 71. usually the publishing label.Spotify: Face the Music SM-1613-E Spotify had yet to post a profit. 2009 Revenues 2011 2012 13.7 Operating expenses N/A 19. taking into account the revenues and plays of that country.” Rather.1 4. as Spotify expanded into several markets in a very short time.0 104% 98% 84% Gross profit N/A -2.9 N/A Advertising N/A 21. Spotify signed several agreements with these right holders. In order to launch in the United States. Spotify’s cash flow situation was thought to be secure.3 73.lvii Tracks received an amount depending on how many times they had been streamed vs.6 156. the total amount of streams in Spotify. Order ref F249634.1 22.6 N/A Cost of sales N/A Cost of sales as percentage of revenue Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU 2010 76.7 Active users (approximation) 2.0 51.5 -21. from 1-May-2015 to 3-May-2015. for a total of $538 million at the end of 2013.1 434.6 N/A Other N/A 0.1 3. Royalties were allocated on a country-by-country basis.5M 5M 10M 20M Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015.1 27.org Figure 4 Spotify financial data 2009-2012.9 -46.9 188.2 130. Specifically.4 Personnel cost N/A 8. Spotify signed deals with all major labels in 2011.8 24. lxi Just a few months later. Dr. Pearl Jam. formally asked in 2013 that a minimum pay rate be set – something that would greatly increase Spotify’s costs if implemented. but this didn’t stop some high-profile artists from publicly speaking out against the company. Usage permitted only within these parameters otherwise contact info@thecasecentre. Taylor Swift – one of the top selling artists of the 2010s – removed her entire catalog from Spotify and other streaming services.lix Any changes in the business model to try to put the company on a better financial path.SM-1613-E Spotify: Face the Music Artists were then paid by the label or publisher according to their contractual royalty rates. or to diminish criticism from popular artists that could hurt its carefully groomed public image.” December 2013. despite the large share of revenue destined to royalty payments. Niche Indie Album Classic Rock Album $3.000 Source: Spotify Ltd. some even pulling their songs from the service.lx Beats even enlisted several leading music magazines and music blogs to curate its radio stations. For example. at Universitat Wien.000 Spotify Top 10 Album Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU Global Hit Album $145. featuring endorsements by celebrities like Bono. couldn’t be made in a vacuum. The largest musician union in the United Kingdom. Taught by Dr Steffen Keck. In 2013. Thus. and many others. in November 2014. for example.lxiv Both iTunes Radio and Google Music Play All 12 IESE Business School-University of Navarra Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. different artists with the same amount of plays could receive very different royalty payments. Dre. Order ref F249634. Eminem. It was backed by a multimillion-dollar advertising campaign. Yet.lxii Beats was only one of several music streaming services that had been launched since Spotify had entered the U. lviii Spotify defended itself by pointing out that actual royalties received by artists depended on their deals with the labels that published them.org Figure 5 Monthly royalty rates for 5 anonymized albums . Spotify’s success had brought something other than millions of users. amongst great media fanfare. “Spotify explained. Spotify faced increased criticism from artists for the low amounts they received. Apple announced the purchase of Beats for $3 billion. it had brought competition.S. See Figure 5 for examples of actual monthly royalty rates. from 1-May-2015 to 3-May-2015. Beats – a manufacturer of audio accessories and components – launched Beats Music.lxiii and Apple had followed shortly.000 Breakthrough Indie Album $76.000 $425. market.300 Actual Monthly Royalties for July 2013 $17. The Competition In January 2014. tech giant Google had launched its own subscription service. Rdio added a free. Other competitors were the so-called “Internet radio” services. YouTube was another strong competitor.Spotify: Face the Music SM-1613-E Access came preinstalled in the hundreds of millions of iOS and Android smartphones that were being sold every year. at Universitat Wien. far ahead of other developed countries.99. Users of the Google-owned video streaming site often uploaded music videos.lxviii Pandora had already added non-music tracks in 2011. which could be watched legally after a short advertisement. the sheer size of YouTube’s video catalog made effective enforcement impossible. Taught by Dr Steffen Keck. and Ek himself. Slacker Radio added a premium service that allowed users to play tracks on demand. often pointed at how Sweden’s music industry grew by 27% between 2008 and 2013. several questions might have crossed his mind.lxxiii But could this be replicated elsewhere? Ek might not be able to dwell on these questions for too long. Additionally. headquarters in New York. live performances or even ripped music tracks to the site. the resulting service would allow users to stream both music and music videos for $9. Deezer. users could listen to preset radio stations or create customized ones. allowing users to play tracks on demand. (See Exhibit 4 for a comparison between several streaming music services operating in 2014. instead. YouTube’s global audience size was considerable. market.S. a Paris-based music streaming service with five million paid subscribers worldwide. YouTube’s most viewed music video had more than two billion views. which were reacting and adapting to Spotify’s massive growth. as Daniel Ek left Spotify’s U. iTunes Radio and Slacker Radio were other examples. it started the process of merging its music streaming service GoogleMusic with YouTube. recognized the potential of leveraging such a massive audience. several publishers uploaded music videos for promotional purposes. adsupported service option to its paid subscription servicelxvii and announced that it would start offering non-music content like talk shows and sport broadcasts. Besides Pandora. Spotify also faced competition from several streaming music services already present in the U.lxxiv IESE Business School-University of Navarra 13 . Rhapsody acquired Napster in late 2011. This model allowed companies to pay reduced royalty rates compared with on-demand streaming services such as Spotify.lxv Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015.org Besides new entrants. For example. Could Spotify become a sustainable business? Could it really live up to its own hype and help the music industry grow again after more than a decade of continuous decline? Industry observers.lxix In May 2011. These didn’t offer tracks on demand. While this was not allowed by YouTube and the music labels.) Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU The most similar competitors were other on-demand streaming services such as Rhapsody or Rdio. These services worked in a similar way to Spotify.lxxii Thus. while Spotify’s most popular track in early 2014 had been listened to a total of 200 million times. yet another threat to Spotify’s market position was in the news: Apple was going to embed Beats Music in all the iPads and iPhones it sold.S. Usage permitted only within these parameters otherwise contact info@thecasecentre. These streaming services were not standing still as Spotify captured most of the market.lxvi In early 2014. had also announced it was preparing to launch in the United States in 2014. Order ref F249634. with Spotify leading the charge as streaming made up 70% of Sweden’s total music revenue. from 1-May-2015 to 3-May-2015. In late 2014. and differed mainly in catalog size and whether a free version of the service was offered.lxxi YouTube’s parent company. Google. and therefore allowed for lower pricing.lxx Lastly. from 1-May-2015 to 3-May-2015. Usage permitted only within these parameters otherwise contact info@thecasecentre. Order ref F249634. at Universitat Wien. Taught by Dr Steffen Keck.org SM-1613-E Spotify: Face the Music Exhibit 1 Screenshots of Spotify's user interface in 2014 .Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU Smartphone: 14 IESE Business School-University of Navarra Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. Order ref F249634. Proportion of total Music Industry. at Universitat Wien. Usage permitted only within these parameters otherwise contact info@thecasecentre. "News and Notes on 2013 Music Industry Shipment and revenue statistics". March 2014.org Digital Downloads 40% Ringtones & Ringbacks 1% Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU Physical 35% Subscription & Streaming 21% Synchronization 3% Source: FIAA. from 1-May-2015 to 3-May-2015. IESE Business School-University of Navarra 15 .Spotify: Face the Music SM-1613-E Exhibit 2 Industry revenue breakdown by source. and streaming growth US Music Industry Revenues 2013 Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. Revenues From Streaming Source: RIAA. Taught by Dr Steffen Keck. 3% (Dollar Value) Vinyl Single Music Video DVD Audio SACD Total Physical Unit Total Physical Value TOTAL DIGITAL AND PHYSICAL Retail value is the value of shipments at recommended or estimated list price formats with no retail value equivalent included at wholesale value. “News and Notes on 2013 Music Industry Shipment and Revenue Statistics.1 -6.1% 2.7 $104.4 27.2 0.015.9 6.5 $20. Taught by Dr Steffen Keck.2% 31.7 35.328.7 9.6 $6.1% 0.0 187. full-length downloads and other mobile.7 1.” March 2014. Includes fees and royalties from synchronization of sound recordings with other media.7 -0.0 $1.9 $160.5 -13. Order ref F249634.6 -43.1 1.0 4.7 $1. ringbacks and.267.803.4% 90.0 $3.2 $2.6% CD Single 1.9 $1.6 1.3 212.4% 116.7 -0.5% -0.772.485.6 $2. Volume is annual average number of subscribers for subscription services.6 7.2% -711.6% Ringtones & Ringbacks2 69.S.7 $2.1 $1.3 $166.996.3 159.1 $2.5% -3. Units total includes both albums and singles and does not include subscriptions or royalties.4 $4.1 -$0.4% -24.7 -13.4 $399.1 $3.9% Music Video 10. Includes singles and albums.9 $220.685.5 -18. Includes master ringtones.1% On-Demand Streaming (Ad-Supported)5 $170.6 172. Estimated payments in dollars to performers and copyright holders for digital radio services under statutory licenses.8 -19.0 $1.3% Total Units Total Value 1.1 81.8 8.3 $7. tethered.123.3% 57.0% -12.623.5% SoundExchange $462.2 $1.SM-1613-E Spotify: Face the Music Exhibit 3 2013 Year-End Recording Industry Revenue Statistics U.8% Total Retail Units Total Retail Value 182.2 $2.204.2 $2.1 $628.2 $97.org 2012-2013 .9 39. Source: RIAA.7 $6.569.5 3.6 0. Usage permitted only within these parameters otherwise contact info@thecasecentre. prior to 2013.1% -14.7 118.392. at Universitat Wien.0 $0.584.7 $4.4 $16.5% CD 198.0 $116.4 0.5 Download Single Download Album Kiosk1 Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU Digital Subscription & Streaming TOTAL DIGITAL VALUE Synchronization Royalties6 Physical (Units Shipped) $190. from 1-May-2015 to 3-May-2015.4 $210. Streaming.0% -11.2% LP/EP 6. net after returns) Digital Permanent Download 2012 2013 % CHANGE (Units Shipped) (Dollar Value) 1. Ad-supported audio and music video services not operating under statutory licenses.8% -10.444.0 $590.3 $3.0% 0.6% 67.8 2.8% -37.1% -371.2 0.7% $4. and other paid subscription services not operating under statutory licenses.2% -21.6% -19.361.7 6.4 -41.052. Unit Shipments and Estimated Retail Dollar Value (in millions.4% -41.8% Paid Subscription4 3. 16 IESE Business School-University of Navarra Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. Note: Historical data updated for 2012 and 2011.6% $189.0 28.8% -27.9 $2.233.0 -4.8 -30.1% -12. music videos. Launch Date Comparison of selected music streaming services operating in the United States in 2014 Exhibit 4 Spotify: Face the music Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU .1 2013 2013 2005 2010 2001 2007 Deezer Google Music All Access iTunes Radio Pandora Rdio Rhapsody Slacker Radio Yes Yes Yes Yes Yes Yes Premium only Yes Yes No No Yes Yes Yes Yes Play Tracks on Demand Ad-supported 6 track skips/hour Not available Ad-supported Shuffle mode on mobile Ad-supported 6 track skips/hour (24 day maximum) Ad-supported 6 track skips/hour Not available Ad-supported Shuffle mode on mobile Not available Ad-supported Shuffle mode on mobile Free Service $4.99 Yes Yes $9. Order ref F249634. Taught by Dr Steffen Keck. 13 million 16 million 18 million 20 million 30 million 2014 Beats Music Yes 20 million 2011 Spotify Major Label Support Claimed Library Size U.99 Monthly Premium Fee Yes Mobile App Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015.99 €9.99 Yes Yes Yes $9.95/year iOS only Yes $9.org IESE Business School-University of Navarra Source: Developed by the authors.99 $24.S.99 Android only $9.99 2 $9. Usage permitted only within these parameters otherwise contact [email protected] SM-1613-E Yes Yes 26 million 1 million 20 million N.A. at Universitat Wien. 1 Deezer data corresponds to its service as marketed in Western Europe and is provided here for comparison purposes. Deezer had announced plans to launch in the United States during 2014.99 tier that removed advertising but didn’t enable on-demand playback. 2 Slacker Radio also offered a $3.95 $9. from 1-May-2015 to 3-May-2015. Order ref F249634. Cookson and A. last accessed April 15.com/Technology/story?id=119627. “Killer App. “Labels. “Music Streamer Spotify doubles 2012 revenues after expansion. September 1. http://news.cnn.mtv. http://money.cnet.com/articles/13/02/26/itunes-other-digital-providers-boost-music-industry-to-firstrevenue-growth-in-13-years.com/Technology/story?id=98751.htm?csnumber=22412. http://appleinsider. The Wall Street Journal. “Emusic. xii R. http://www. February 11. Now that’s a real killer app. last accessed April 28. July http://www. 2014.bbc. 26. 2014. last accessed May 9. xix “Roxio buys Pressplay. 2014. xvi Chris Oakes. last accessed April 15. “RIAA. April 8. tech owners sell MusicNet to VCs.php?content_selector=piracy-online-scope-of-theproblem. Taught by Dr Steffen Keck.com/Labels. Parloff. 2001. http://online.com/entertainment/music/news/2003/05/58895.go. vi Daniel Ek interview with PandoMonthly on November 8. xiv Sascha Segan. last accessed May 5.xls.com/politics/law/news/1999/08/21089.com launches MP3 subcription service. http://www.” CNN Money. last accessed June 8.com/2012/11/08/pandomonthly-presents-afireside-chat-with-spotify-ceo-daniel-ek/. “CNET to buy. February 26.” Wired. 2014. “Spotify’s 200m credit hints at IPO. xv Matt Hines and John Borland. RealNetworks. 2014.” Wired.com.oecd. 2000. sweep away suit. 2014. 2014.org/iso/iso_catalogue/catalogue_tc/catalogue_detail. “The 25 worst tech products of all time..riaa. other digital providers boost music industry to first revenue growth in 13 years. 2014 xxii Swiff Kathy.Inc.com. Bertelsmann faces more than $17 billion in copyright lawsuits.go.com/es/information/.com. last accessed May 2.” Spotify LTD. https://www.wsj.” Mtv.uk/2/hi/entertainment/1719113. 2014.5 Mbit/s — Part 3: Audio. xviii John Borland.itu. 2001. 2014.html. http://archive. 2014. Tynan. http://archive. ii “Information. iv Kevin Bostic.com.” Appleinsider. 2014. xvii “Online Music PressPlay launches.com/techbiz/media/news/2001/02/41745. 1993. Last accessed May 5.html?page=3. March 24.co. last accessed April 11.” PCWorld.” http://abcnews.html?siteedition=intl#axzz2yseibTRy. Thanks to its ballyhooed Napster alliance. last accessed May 2. last accessed May 5.” International Telecommunications Union (Geneva). at Universitat Wien. 2012. “Unsigned artists make money online.com/news/articles/SB10001424052748704182004575055742931769102?mg=reno64wsj&url=http%3A%2F%2Fonline.” Financial Times. 2014. http://www. http://news.com. Napster lives.com/news-releases/realnetworks-launches-realone-rhapsody-music-subscription-service-71130967.int/en/ITU-D/Statistics/Documents/statistics/2013/Individuals_Internet_2000-2012.iso. 2014. November 14. 2014. “iTunes. x “Percentage of Individuals Using the Internet 2000-2012. March 9.stm. December 19. July 27. February 10. May 28 2003. April 12.com.SM-1613-E Spotify: Face the Music References i R. 2014.” CNET News. last accessed April 4.com. from 1-May-2015 to 3-May-2015. 2014.reuters. 2014. 2014.com/magazines/fortune/fortune_archive/2003/09/01/348194/.com/article/2013/07/31/us-spotify-results-idUSBRE96U0QZ20130731. last accessed April 10. 19. retune. Last accessed October 23 2014 18 IESE Business School-University of Navarra Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU ix “ISO/IEC 11172-3:1993 – Information technology — Coding of moving pictures and associated audio for digital storage media at up to about 1. 1999. v “Scope of the problem. 2014. July http://www.” RIAA. last accessed May 2.” Wired. 2014. to spin off Rhapsody”. last accessed May 9.xls. vii “Napster Shut Down.org/sti/broadband/1c-TotalBBSubs-bars-2013-06.cnet. June 2013. Viacom.wired. 5. May 2003.html. http://abcnews.com/article/125772/worst_products_ever.wsj. http://www. ABC News.” ISO.” Abcnews. http://www.ft.prnewswire. http://press. 2003.spotify. Usage permitted only within these parameters otherwise contact info@thecasecentre.” http://www. last accessed May 2.wired.-techowners-sell-MusicNet-to-VCs/2100-1027_3-5668223. 2014. June 2013. OECD.com/news/1122406/emusiccom-launches-mp3-subscription-service/. Rio.html. 2001. viii “Napster’s 11th hour frenzy.” BBC News. last accessed April 15. 2005.com/physicalpiracy.com/21001027-5107696. xiii Richard Simon. 2003. “RealNetworks.org iii . xxi “RealNetworks launches RealOne Rhapsody music subscription service”. http://pando. http://archive. http://news.com/intl/cms/s/0/1c43635e-a612-11e3-9818-00144feab7de. Massoudi.com%2Farticle%2FSB10001424052748704182004575055742931769102.” Reuters. last accessed May 11. 31. xx June D. last accessed May 8. 2001.html. last accessed April 15. last accessed April 10. 2006. MP3.pcworld. xi “Total fixed and wireless broadband connections by country (June 2013).wired.” CNET News. 2014. xxx “Sony Connect Online Music Store Launches Today. 2003. 2011. last accessed May 2. 2014.blogs. 2013.net/phoenix. xlii “Pandora and Royalties.html. 2005. last accessed June 8. xliv “Spotify Now Available to Everyone in the UK.. from 1-May-2015 to 3-May-2015. last accessed July 14. http://www.” Apple Inc. January 21. “Radiohead Says: Pay What You Want. http://news.org “iTunes music downloads top 25 million songs.nytimes.com/newsroom/id/1543014.” Apple Inc. http://www.theguardian. last accessed May 8. 2007. 2014.S. Smartphone Sales Grew 72 Percent in 2010. http://blog.com/en-us/news/press/2006/nov06/11-13zunelaunchpr. 2010. October 1. “Today is Napster’s last day of existence”. May 26. http://phx.1666973. September 9.com/2012/06/04/r-i-pzune/?_php=true&_type=blogs&_r=0. xxvi Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015.com/SCA/company-news/press-releases/sony-corporation-of-america/2004/sony-connect-online-music-storelaunches-today-off.zhtml?c=176060&p=irol-newsArticle&ID=1089999&highlight=. June 4..apple.com/pr/library/2013/02/06iTunes-Store-Sets-New-Record-with-25-Billion-Songs-Sold. February 6. 2014. 2013..” Amazon.com/2013/06/26/pandora-androyalties/#more-5604.” NPD Group.com/technology/blog/2007/sep/01/sonydisconnect.npd.000 Legal Downloads From Major and Independent Record Labels Around the Globe. 2008.com/2011/11/30/technology/napster_rhapsody/.com.gartner.” Apple Inc. “Apple’s new iPod nano sports fattest profit margins yet. http://www. xxxvii “Changes coming to iTunes Store. 2014.I. January 6. xxxviii Josh Tyrangiel. Zune. 2014.html.” Gartner Inc. http://bits.html.apple. 2009.apple. last accessed May 10. 2014. last accessed May 11. 2014.. http://blog. February 9. “R. December 27. http://www.” Apple Inc. 2009. last accessed May 9.” Spotify LTD. last accessed May 8.html. last accessed May 10. Music Retailer. last accessed May 10. last accessed May 11. 2014.com/articles/07/09/19/apples_new_ipod_nano_sports_fattest_profit_margins_yet..com. last accessed May 2.com/pr/library/2003/04/28AppleLaunches-the-iTunes-Music-Store. xliii “We’ve Only Just Begun!” Spotify LTD.. http://www. http://www. 2004.” Apple Inc. August 29. last accessed May 10. 2013. Last accessed May 5. Taught by Dr Steffen Keck. xxxvi “The NPD Group: Amazon Ties Walmart as Second-Ranked U. 2014. 2014. 2014.” Apple Inc.com/pr/library/2009/01/06ChangesComing-to-the-iTunes-Store. October 7. December 15. last accessed May 2.apple. http://money. September 1. June 4.” Seeking Alpha.com/us/2009/02/10/spotify-now-availableto-everyone-in-the-uk/. October 16. last accessed May 11. http://www.com/pr/library/2003/12/15iTunes-Music-Store-Downloads-Top-25-Million-Songs. 2014. xxvii “iTunes Store sets new record with 25 billion songs sold. June 26.com/wps/portal/npd/us/news/press-releases/pr_100526/. 2014 November 30 SM-1613-E 2011. 2003.microsoft.corporate-ir.com/pr/library/2009/01/21AppleReports-First-Quarter-Results. 2010. http://www. last accessed May 8. last accessed May 9. http://appleinsider. 2014. 2007. July 10. xxxii Jack Schofield. 2003. “Sony disconnects Connect and adopts Microsoft’s DRM for portable players... 2006. April 28.apple.html. Behind Industry-Leader iTunes. F1Q10 (Qtr End 12/26/09) Earnings Call Transcript.00.” The Guardian. xxxi “Microsoft’s New Zune Digital Media Player on Store Shelves Tomorrow.” Pandora Media Inc..pandora.com/2013/07/10/happybirthday-to-the-pandora-app/.cnn. xxxiii Nick Wingfield. https://www..” Appleinsider. xxxiv “Apple reports first quarter results. xxiv “Apple launches the iTunes Music Store. 2014.spotify. 2014. Offering Music Fans More Than 500. http://seekingalpha. 2014. 2014..shtml.P. xxxix “Pandora for Everyone.sony.html. https://www.com/time/arts/article/0. January 25. http://blog. 2007.pandora. IESE Business School-University of Navarra 19 .” The New York Times.pandora.” Pandora Media Inc.html. xl “Gartner Says Worldwide Mobile Device Sales to End Users Reached 1.6 Billion Units in 2010. last accessed May 10.com/2005/08/29/pandora_for_eve/.com/pr/library/2003/10/16AppleLaunches-iTunes-for-Windows. xxxv “Amazon MP3 Adds Music Audio Downloads from Warner Music Group. last accessed May 2. xli “Happy Birthday to the Pandora App. at Universitat Wien. November 13. xxviii “Apple Inc. http://www. 2007. http://content. CNN.. 2014.” Microsoft Corp.Spotify: Face the Music xxiii Pepitone Julianne.” Time Magazine. 2014. http://news..com/article/184328-apple-inc-f1q10-qtr-end-12-26-09-earnings-call-transcript?part=single. last accessed May 9.8599. 2014. 2014. last accessed May 10.com/us/2008/10/07/weve-only-just-begun/.aspx. 2014.” Pandora Media Inc.” Sony Corporation of America. xxv “Apple launches iTunes for Windows. Order ref F249634.spotify. Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU xxix Prince McLean. Usage permitted only within these parameters otherwise contact [email protected]. com/articles/14/01/03/digital-music-sales-drop-for-first-time-since-advent-of-itunes-store-execsblame-streaming. http://www. 2014. 2013. lxiii “Apple Announces iTunes Radio.com/us/2014/01/keep-the-music-playing-rdio-is-now-free-on-the-web.” Android Official Blog.” CNET.SM-1613-E Spotify: Face the Music xlv Paul Sloan.beatsmusic. 2014.com. 2014.html.cnet. January 2014.com/pr/library/2013/06/10AppleAnnounces-iTunes-Radio. from 1-May-2015 to 3-May-2015. last accessed May 11. last accessed June 8. 2011. 2014. November 21. 2014.crunchbase. July 13.com/85490944.youtube..” Rhapsody International Inc. 2014 . last accessed July 15. “Deezer Will Launch In The U. June 10.com/article/2014/04/29/us-spotify-sprint-idUSBREA3S10T20140429. “Documents reveal majors own part of Spotify. 2014 lv Josh Constine.com/us/2011/07/14/hello-america-spotifyhere/.html. https://www. at Universitat Wien.” Apple. Spotify: back catalogue removed from streaming services”. 2014 Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU liv Data from Spotify’s entry in Crunchbase startup database..html. http://www. April 29.apple. last accessed April 29. lii “Hello America.com/2014/music/news/vivendis-universal-music-group-bottoming-out-1201119832/. http://latimesblogs.theguardian. http://www.latimes. February 24.. lvi Alex Pham.org John Hopewell. http://techcrunch.com. http://appleinsider. 2014.com/pr/library/2014/05/28Apple-to-Acquire-Beats-Music-Beats-Electronics..” Apple Inc. 15. 2014.com/news/spotifygrowing-like-mad-yet-so-far-to-go/. 2014.com/article/2173333-cumulus-media-management-discusses-q1-2014-results-earnings-calltranscript?part=single. January 16. lAppleinsider.com/organization/spotify. https://www.” Computer Sweden.rdio. last accessed May 11. execs blame streaming.com/curators. “Android@I/O: Just Press Play. http://computersweden. The Guardian.se/2. Taught by Dr Steffen Keck. last accessed June 8.com. 2014.S. Spotify Here. Last accessed November 5 2014 lx Advertising material on Beats Music YouTube channel. 2014. http://www. lviii Mark Townsend.spotifyartists. yet still far to go.apple. 20 IESE Business School-University of Navarra Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. Order ref F249634.240046/documents-reveal-major-labels-own-part-of-spotify.” Techcrunch. last accessed November 26.html. Elsa Keslassy. lxviii “Cumulus Media Management Discusses Q1 2014 Results . launches music service in the U. xlvii “Spotify Engineering Culture”.rhapsody.. “Spotify strikes marketing partnership with Sprint. February 2014. “Spotify buttons up deals with Warner Music.Earnings Call Transcript. 2014. “Taylor Swift vs. “Keep The Music Playing: Rdio is Now Free on the Web.com/user/officialbeatsmusictv/videos. last accessed June 8.com.com/entertainmentnewsbuzz/2011/07/spotify-buttons-up-deals-with-warner-launches-musicservice-in-the-us-. November 21. Usage permitted only within these parameters otherwise contact info@thecasecentre. http://news. July 14. 2013.” Appleinsider. http://www. Cit. Next Year And Fight Head-To-Head With Music Streaming Giants. Op.” Spotify LTD. last accessed Nombever 26. last accessed May 11.html.com/2011/10/03/rhapsody-to-acquire-napster/.reuters. Spotify LTD. 2013. liii Marcus Jerrang.” Techcrunch.com/technology/2013/jul/20/spotify-radiohead-musicians-union-rights. last accessed May 11. li See data in Exhibit X.es/2013/05/androidio-just-press-play. http://www. 2014. 2013. 2014. 2014.com/spotify-explained/. lxi “Beats Music Curator Program.” Beats Music LLC. http://press. last accessed May 11. July 20. March 12. last accessed May 11. http://seekingalpha.” Spotify LTD. “Musicians’ Union demands new pay deal from Spotify.” Reuters. Dredge Stuart. May http://officialandroid. 2014.com/2013/11/21/deezer-will-launch-in-the-u-s-next-year-and-fighthead-to-head-with-music-streaming-giants/. 2014. lix Hern Alex. xlvi Marina Lopes. 2014. lxvi “Rhapsody to Acquire Napster. 2009. Last Accessed November 2014 xlviii xlix “Digital music sales drop for first time since advent of iTunes Store. lxv Romain Dillet. last accessed May 11. August 7. “Technology Crossover Ventures Funds All Of Spotify’s $250M International Growth Round. last accessed May 7. April 29. lxiv Hugo Parra. http://www. 2014.spotify. last accessed November 26.blogspot. “Vivendi’s Universal Group Bottoming Out. 2011. 2014. 2014. last accessed May 9.com/technology/2014/nov/03/taylor-swift-spotify-artists-discography-streamingservices.” Rdio Inc. lxvii October 3.com. May 28.” The Guardian. lxii “Apple to acquire Beats Music and Beats Electronics.com/2013/11/21/technology-crossover-ventures-spotify/. 2013. http://techcrunch.” Los Angeles Times. “Spotify: Growing like mad. http://blog.com. 2014.. last accessed May 9.2683/1.theguardian.idg. November 3 2014. 2014. last accessed May 9. last accessed May 11. http://www.” Seeking Alpha. 2014.S.” Variety. http://vimeo. lvii “Spotify Explained. http://variety. 2014.. 2014. “Apple said to be embedding Beats music service into IOS. 2011. last accessed June 8. 2014 lxxiii “Music in Sweden: I have a stream.” Gizmodo. “Gangnam Style.com/watch?v=9bZkp7q19f0. 2014.” Youtube.com.com/2011/05/03/knock-knock/. March 22.” Slacker Inc. last accessed November 26. 2014 IESE Business School-University of Navarra 21 . from 1-May-2015 to 3-May-2015.” Cnet. http://blog. Order ref F249634. last accessed May 11.org lxxii Eric Limer. http://www. Joan E. last accessed November 26. lxxi Psy.youtube.” Pandora Official Blog. “YouTube Music Key Hands-On: Streaming Music Has Never Been Easier. 2011. 2014. “Knock.com/news/business/21599353land-abba-takes-streaming-i-have-stream.. May 3. 2014.” The Economist.com/press/. http://www. http://www.slacker. Taught by Dr Steffen Keck. Purchased by Kateryna Krasnoshchok for use on the Business Strategy Individual Assignment SS2015. last accessed May 9.Spotify: Face the Music SM-1613-E lxix Tim Westergren.cnet. May 17. lxx “Slacker Launches Slacker Premium Radio with On-Demand Access to Music Library. November 20 2014. Solsman. November 19. Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F249634 CoursePack code C-461-235765-STU lxxiv Roger Cheng. Knock. last accessed May 11. at Universitat Wien.com/news/apple-to-embed-beats-music-service-into-ios-software-ft-says/.pandora. http://blog.com/youtube-music-key-hands-on-streaming-music-has-never-b-1661089830. http://gizmodo. 2014.economist. 2014. Usage permitted only within these parameters otherwise contact info@thecasecentre.
Copyright © 2024 DOKUMEN.SITE Inc.