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Extending the touchpoints and avenues by which users can stream music

Key facts

  • In the entertainment space, Spotify¹ has become a pioneering example of an atomized service, achieving ubiquity by enabling access through multiple third-party touch-points (e.g. Sonos, Ford, iOS, Android and Samsung Smart TVs).
  • The company has released Software Development Kits (SDKs) for iOS and Android developers and more recently launched the Spotify + Uber integration, allowing users to remotely control music in enabled Uber rides.

Uniqueness

  • Spotify is extending the touchpoints and avenues by which users can stream music through their service by collaborating across sound system, home and auto entertainment providers.
  • Spotify Connect sets up a connection between Hi-Fi and Wi-Fi – allowing streaming directly via Spotify and not via a user’s phone (which instead can serve as a remote and remain free to use for other activities).

Value

  • Spotify is valued at over $10 billion.
  • Services 50 million users, with over 12.5 million paying subscribers.
  • Approximately 30% of revenue is retained by the company, while approximately 70% is split among rights holders.

Approach

  • Spotify has created connections with 30+ partners.
  • Spotify utilizes a Freemium business model, with potential to drive conversions from new partnerships and platforms.
  • In order to benefit from the interoperability that Spotify Connect offers, users must subscribe to Spotify Premium ($9.99/mo). 

Spotify Connect is one of more than 100 case studies identified as part of the World Economic Forum’s Digital Transformation of Industries initiative.  An overview of the DTI program can be found here.

1. Sources: ”The Era of Living Services”, Accenture, “How Spotify Turned Free Music into a $10+ Billion Valuation”; Growth Hackers,; Pocket-link; Spotify Connect landing page; WEF/Accenture Analysis

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