Questions for the Spotify case study

1. What factors contributed to the success of Spotify? And yet, what were the complex set of
issues faced by Spotify in the case study? The case ended with one decision making point. Was
there one decision making point or several? Illuminate please.

2. What type of pricing model/s is/are being followed by Spotify? What are the plusses and
downsides of this/ these models (only the model/s)? (this may be from different places in the
case). In an extension to the above question, explain the revenue split for Spotify in the context
of its premium and free users. And what should Spotify do to convert the free users into premium
users?

3. Are the free users undermining the value of the platform, for instance, should Spotify
eliminate free users after a certain time period? In a broader context, even if prospects prefer
their services and continue using only their free services, is it at all useful for Spotify? Explain.

4. What is Spotify’s overall pricing objective that you can gauge from the pricing models
(strategies)? How do you read this? Why is that important in the context of the Spotify case? Do
you think the overall objective is working out for Spotify? How about the future?

5. Explain Spotify as a digital service platform? Who are the participants in the digital music
streaming value chain, and how do they contribute to the generation of value? What is Spotify’s
gain from the platform – what is the biggest source of competitive advantage for the platform?

6. Who are the customers of Spotify? What is Spotify’s value proposition for its customers?
From the case, do you discern any differentiation that the Spotify brand can offer through its
value proposition? If yes, can it last? If no, what must the brand do to fall in the customer’s
consideration set? What do they gain from participating in the value chain?

Questions 5 and 6 are distinct. Try not to overlap the answers.

7. Who is/ are the strongest player/s in the value chain? Why? Comment on the shifts in the
power across the value chain over time. Comment on the relationship between artists and
Spotify. Do you agree with Spotify’s approach to tackling the relationship with artists? Explain.

8. Discuss the role of competition in the music streaming industry – how has it altered the rules
of competing in the industry? How can Spotify tackle its competitors, especially that they are
giants who are often endowed with better resources and capabilities to attract and retain
customers mainly by cross selling music services, for instance, Amazon as a giant marketplace
cross selling to its users or Apple cross selling its services to device owners with the added
advantage of its app centre?

9. Was podcast the best way forward for Spotify (it is making money and there is growth, but is
it the future)? Is ‘audio’ really the future for Spotify? Yes/ No and explain – especially the issues
it faces in terms of the differences between its podcast business and the music streaming
business. How will the future of the music industry evolve – for instance, do you think the
powerful music labels would own customer relationships in the future?