This is an assignment I completed for my Project and Portfolio II: Market Research class at Full Sail University. The objective of this assignment was to create a comprehensive market analysis and make recommendations based on findings and conclusions.

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A Market Analysis for
(Spotify)
(Alex Hayton)
Full Sail University
Project & Portfolio II: Business and Marketing
(9/24/2020)

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EXECUTIVE SUMMARY
This analysis report takes a look at the market in relation to Spotify. It looks at Spotify’s
subscribers and market share compared to other competitors in the streaming industry. It looks at
the way Spotify brings in revenue. This report gives a brief overview of the company; Spotify’s
relation to other streaming services are also reviewed. This report includes recommendations on
how Spotify can increase their presence in the music streaming industry and increase their
subscribers.

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OBJECTIVE
Based on its current market, suggest ways in which Spotify could increase their presence
in the streaming industry and increase their subscribers.
RESEARCH METHODOLOGY
Information used in this report is mostly external, secondary information sourced from
the internet and online databases and was gathered during the month of September 2020.
Financial information was current on the day it was sourced. The information is current as of
2020. The information on Spotify was based on recent year-end figures from 2019.
RESEARCH AND KEY FINDINGS
Spotify is a music streaming company founded by Daniel Ek and Martin Lorentzon.
Spotify streams music, videos, and podcast through licensing agreements (Spotify: Most
Innovative Company, 2000).

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Spotify is the world’s most popular
streaming subscription service with
299m users, including 138m
subscribers, across 92 markets (Spotify
Company Info, 2020). Midway
through 2019 Spotify was estimated to
have a 35% market share of total paid
subscriptions (Counterpoint, 2020).
Spotify Offers streaming and subscription services in regions such as North America, Latin
America, Europe and internationally. With demographics to include men and woman from both
set of ages 18 -24 and 25 – 34 all in which are mobile users.
Source: Counterpoint Research

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Spotify is not financially secured, as of September 6, 2020, they have a net income of -323,000
(Yahoo, 2020) and a net profit margin of -4%. Although Spotify is the world’s most popular
streaming subscription service, the company is experiencing a slowdown in subscribers overall
and the unsteady rate of revenue. There is hope in the future they can overcome these
disadvantages. Majority of Spotify’s revenue comes from its Premium Service, which provides
both online and offline ad-free music streaming to paying subscribers, but with subscriptions
slowing down, this can become a challenge in the future. All hope to overcome these
disadvantages turn to advertisement on their platform, their subscriptions and expanding in more
regions.
CONCLUSIONS

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Spotify is still holding on strong against all competitors to include but not limited to
iTunes, Tidal, Pandora, Amazon Music, etc. However due to majority of the company’s revenue
coming from its Premium Service and advertisements, revenue is still able to compete with other
streaming music companies. One disadvantage is the fact that the company is still owned by both
founders and they do not have the advantage of having a parent company. Existing problems
such as payment agreements with rights holders such as publisher and clients and artist opting
out of releasing music due to low payout fees causes Spotify to look at their legal rules regarding
digital streaming and to focus on new ways to increase awareness in different regions and ways
to increase subscribers.
RECOMMENDATIONS
Based on research and conclusions, Spotify needs to find new ways to increase their
presence in the streaming industry and increase their subscribers. As music streaming continues
to become bigger, so does the need to find other ways to make revenue. Spotify should focus on
making fair payment agreements with rights holders such as publishers and clients to ensure
more artist will release music through them, giving them are larger selection of music compared
to competitors. Spotify should also focus on being fair when paying out artist to ensure they do
not opt out of releasing music to their platform.
Another analysis report should be produced in March 2021 to research how changes have
impacted Spotify’s subscribers’ rates and how other streaming services have affected Spotify’s
revenue. This could create more recommendations for Spotify.

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REFERENCES
Company Info. (2020). Retrieved September 06, 2020, from
https://newsroom.spotify.com/company-info/
SPOT Interactive Stock Chart | Spotify Technology S.A. Stock. (2020). Retrieved September
06, 2020, from https://finance.yahoo.com/chart/SPOT
Spotify Technology S.A. (SPOT) Company Profile & Facts. (2020, September 06). Retrieved
September 06, 2020, from https://finance.yahoo.com/quote/SPOT/profile?p=SPOT
Spotify: Most Innovative Company. (2000, January 01). Retrieved September 06, 2020,
from https://www.fastcompany.com/company/spotify
Watson, A. (2020, March 11). Spotify users by age in the U.S. 2018. Retrieved September 07,
2020, from https://www.statista.com/statistics/475821/spotify-users-age-usa/