Name: Insights: Positives and Pitfalls of Spotify's Streaming Revolution
Uploaded: 2020-03-23
Duration: 2 min
Description: The streaming platform once derided for destroying an industry is now hailed for rescuing it. Can now-public Spotify discover profits? And how does its foray into podcasts figure?

 ALEX NORSTROM: So if you look back in time, let's say 20 years ago, there were roughly 20,000 to 30,000 artists that were living off of their art. And cost of distribution was high. So you saw that the money went for the proven artists. And you couldn't really fault the industry for that, right? So at the same time, on the customer side, an album cost 15 bucks on average. And so you'd think twice before you would go for a new artist. Today, that cost is virtually zero, right? So just on Spotify alone, we have 11 billion artist discoveries every month, which literally means that there are 11 billion chances for artists like Fletcher to gain a new fan. So I think we've come a long way from what you described. If you peek a little bit under the hood, there are really three things that power the business models. One is Freemium. So you have the free product, and then you have separately also the premium product. And these are complementary products, right? So you start out on free, and eventually if you want more control and desire all the extras, you move on to premium. So the separate but complementary nature. And then you have ubiquity, which is hugely important for us. As an independent company early on, we decided we're going to be everywhere where our listeners are, right? Not tied to one specific ecosystem, because in the post PC era, people tend to have multiple devices, and they change them out over time. Thirdly, personalization-- also key to our business. We wanted to make a product that would improve on itself over time. All right, so for instance, a playlist would, because of our investments in machine learning and algorithms, improve over time. And if they get better over time, you will then stick around for longer. And if you do that, that's good business for us. So those are the three things that are really kind of making up our model and power the kind of growth of new things like Discovery Weekly and Summer Rewind and all these things that we put on top of this. 

Insights: Positives and Pitfalls of Spotify's Streaming Revolution

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The platform was once derided for destroying an industry.

Spotify's Streaming Revolution

The streaming platform once derided for destroying an industry is now hailed for rescuing it. Can now-public Spotify discover profits? And how does its foray into podcasts figure?

If you look back in time, let's say, 20 years ago there were roughly 20 to 30,000 artists that were living off their art and cost. The distribution was high. So you you saw that the money went for the proven artist and he couldn't really fault industry for that, right? So at the same time, on the customer side, you know an album called 15 Bucks on average, as you think twice before you would go for a new artist. Today, that cost is virtually zero. So Justin Spotify along. We have 11 billion orders discoveries every month, which literally means that they're 11 billion chances for artists like Lecture to gain a new son. So I think we've come a long way from from from when you would you describe if you peek a little bit under the hood. The really three things that power the business models wanted freedom. You have the free product on, then you have separately or for the premium product, and these are complementary products. You start out on free, and eventually, if you want more controlling desire, all the extra C move on to premium. Um so the separate but complementary nature on. Then you have ubiquity, which is hugely important for us. That an independent company. Early on, we decided we're gonna be everywhere where our listeners are not tied to one specific eco system. Because in the post, p p Sierra people tend to a multiple devices changed amount of time. Thirdly, personalization also keep our business. We wanted to make a product that would improve on itself over time. So, for instance, the playlist would, you know, because of our investments in machine learning algorithms improved over time. And if they get better over time, you will don't stick around for longer on. If you do that, that's good. Good business for us. Um, so those are the three things that really kind of making up for our model on power, That kind of growth of new things, like, you know, Discovery Weekly and someone rewind and all these things that we put on top of this