Spotify is a premium music streaming service that is currently one of the most popular digital platforms. Spotify is the undisputed king of music and audio streaming services among the various digital platforms that provide music streaming.
Spotify’s website has millions of streamers and listeners, making it a great venue for musicians, artists, content creators, and other podcasters to broadcast their work to a global audience.
In this case study, we will discuss marketing strategy of Spotify, such as its campaign, marketing mix, social media marketing, and dynamic entry in India.
Spotify is a Swedish music streaming platform developed by Daniel Ek in 2006, whereas it was launched in 2008. It provides the audience with a freemium music service meaning that basic features are free but advertisements will be there in between. For more features, the listener needs to take a paid subscription. It is used all over the world, popular in the US, Europe, Australia, Africa, Asia, and New Zealand. It can be comfortably used on Windows, Android, iOS, and Linux computers.
Spotify came into existence to deal with music piracy before people used to download pirated music files, which was a problem for the music industry. Hence Daniel and Martin Lorentzon (Co-Founder of Spotify) turned this problem into an opportunity after which Spotify was founded.
Marketing Mix of Spotify
Marketing mixes are analyzed with a set of components that eventually form a marketing strategy for that particular brand. With Spotify, let’s use a marketing mix of the 4 P’s to understand – Product, Price, Place, and promotion.
Spotify’s major product is music streaming. Traditional ways of listening to music were to buy CD tapes and cassettes, with Spotify coming in is all changed. According to the types of accounts on Spotify, you get the option to download music offline or online. Also, loves Premium accounts can select the types of content they want, avoid all advertisements, and much more. Free accounts can play music online only.
Of course, we know, we can listen to content for free or by paying a subscription. Since they are a freemium pricing model, there are ads while listening for free users, eventually generating revenue for Spotify. As per the need of the user, one can choose out of four premium pricing models: Individual (744rs / month for 1 account), Duo (968rs / month for 2 accounts), Family (1117rs / month for up to 6 accounts), Student (371rs/ month for 1 account). Prices differ from one country to the next.
Earlier listening to music was a hazard. You either buy CDs, cassettes or listen to the radio, or download music. All of them are not so easily accessible. With Spotify entering the market just when the internet boomed all over the globe. So Spotify is an online platform to listen to music, through which the content is accessible to everyone around the world.
Spotify used social media platforms as their most-used approach to promotion. Especially Facebook and influencer marketing. Also, word of mouth played a very major part in the growth of Spotify due to the product being so organic and easy to use. With this keeping in mind, the experts strategized and came with plans to make the product bigger and bigger every time.
Marketing Strategy of Spotify
We now have a better understanding of Shopify’s products and marketing components after seeing the company’s overview. Let’s take a look at Spotify’s marketing strategy to understand how it got to where it is today as the most popular music streaming service. In reality, few rivals can match Spotify’s user base. The marketing strategy of Spotify is not static, but it is evolving. Spotify isn’t just following the latest trend; it’s also inventing new ones to promote itself. So, let us dissect Spotify’s marketing strategy.
A freemium model
Spotify has made the freemium model available on phones and desktop computers or even laptops. Users will receive an ad every three to five songs. These advertisements are a way to generate revenue for the company. No free user can skip the ad or play in shuffle mode or even skip through songs without an ad.
Although this advertising can get irritating after a time, most individuals enjoy getting free items and want to tell their friends about it. Spotify is being talked about among brand marketers in the hopes of marketing their brands through the service because it has a platform that can promote to millions of consumers.
A collaboration for content
The second way of marketing that Spotify uses very constantly is collaborating with artists. This not just increases their audience base but also gives them exclusive content. This is a very familiar technique but not very often used. Spotify not only included visual and audio elements in their songs for free, but it also made the artist’s work more accessible to their listeners. Which is a major reason that more and more artist small to big want their music to be published on Spotify.
Because the streaming service is becoming increasingly competitive, all businesses must work to provide value to their customers. Spotify appears to be producing excellent content that people appreciate and maintaining that momentum by providing the most tailored experience possible to clients. That is what makes Spotify so exclusive from all its competitors.
In 2020, with people being home, the podcast community started gaining some audience, Spotify once again came to the rescue and added themselves into the Podcast streaming market as well. Not just deals signs and contracts with big brands like Joe Rogan but people like Robert Downey Jr, Elon musk, and Mike Tyson are also featured in the podcasts which again is exclusively available only on Spotify.
Usage of Data
Spotify has used the tool of technology and data like no one. The algorithm usage is impeccable. It is so well designed for users to explore new music and expand their list of songs. It very specifically records the users’ behaviors, interests, and past actions and then uses a powerful algorithm to create a customized playlist for each of them and personalized recommendations.
The most surprising part is the efficiency of the algorithm and a user gets an experience without extra effort or fee. All one needs to do is use the platform as their regular music-playing app and the algorithm will pick it up and send you recommendations according to your behavior. Also making a user value of paid service that it provides. Give the user the best experience as soon as they put their earphones on.
These loyal users tend to tell others, family, and friends about the app automatically marketing the product. Of course, Social Media marketing has played such a big role in these marketing strategies. And we will also discuss the best ads since 2016.
Social media Marketing
Spotify’s social media is so well created and maintained that every music lover appreciates and enjoys it. Of course, one gets regularly updated about the new albums and launch dates. Creating constant buzz Spotify also promotes new artists as a way of marketing strategy as well as supporting each other. It has various social media handles, depending on the geographical area.
Consistent branding all over the handles. Also, the platform uses various campaigns, most constantly hashtag campaigns. Also, the trendsetters of all time are constantly evolving. This creates brand awareness and visibility in the market.
Influencer marketing on social media platforms has been one of the most successful collaborations ever seen. Running sponsored ads there too, which influencers help them.
In 2017, the company launched the #2018Goals global hashtag campaign. I’m sending out a message that 2018 will be a fun and upbeat year of rhythm. Since #Goals were trending that year, in a way capitalized on the idea to gain popularity.
Dynamic Entry in India
Spotify came to India in 2019 February. Within a week of its launch with 1 million subscribers, we’re already there. In a year Spotify India took over 15% of the Indian streaming market.
To further expand their horizons, they cracked a deal with music brand T-series, with which the songs loved by Indians, at least 1,60,000 songs will be streamed on Spotify.
Very similar marketing strategies were applied in India too, one major was video advertisements. The algorithm very well understood the listeners’ behavior and interests. Creating interactive ads also first started in India. Plus offering various languages like Hindi, Punjabi, and even Tamil and Telugu made Spotify the king of Music Streaming in India.
Best Campaigns in India and Worldwide
This campaign was introduced again for all Indians as there was observed a rising trend of global music being loved by Indian Listeners. Billboards were crated to send through the message and social media was flooded during this venture. Listening Together features some great playlists based on followers, one of the very constantly used is ‘Today’s Top Hits’ followed by 15 million followers.
2014 Spotify Launched the #thatsongwhen campaign- to evoke memories from music. This connected the audience emotionally and made them share songs on various social media platforms. 2016 Data-based marketing campaign began. Which worked wonders by connecting users to the Team, helping the company put close attention on personal music choices, and recommended the best for each. 2017 was a great year for Spotify.
Its revenue climbed by 40%, signaling that it was the appropriate time to draw more attention from the globe and make a strong statement, which Spotify did. Spotify’s marketing team continued to rely on social media trends after their successful 2016 and 2017 campaigns. The most popular trend in 2018 was an auditory illusion that first appeared on Reddit.. 2019 Spotify aims to strengthen its relationship with millennials and gen Z, and using memes was the ultimate way.
We can conclude that Spotify is currently one of the most popular streaming music apps. Overall, Spotify has been with us for 13 years and has already made many positive changes in the music industry.
This post discussed some key factors that influenced this company’s activities. Spotify leverages user data to find and follow up-and-coming local musicians, who are subsequently marketed to a global audience.
The idea is twofold: not only will that audience discover musicians they recognize on Spotify, but local artists will be able to use Spotify as a platform to reach a global audience. I hope you learned something new about this media service and audio streaming company.
Do you think we did a good job? Do you want to learn more about digital marketing? Here’s your chance to digitally upskill yourself by attending a free online masterclass hosted by IIDE’s founder and CEO, Karan Shah, and also by reading more case studies like this on our other blogs.