Spotify's basic business model is a freemium business model. The use of the product is free with free ad-supported service and premium paid subscription. 90% of their revenue is from the premium service and 10% from the ad-supported service. They recorded an operating loss of €378 million in 2017.
We see this in the business model of other online sites like facebook. Which interestingly enough was also worked on by Shawn Parker as we saw in class.
Does it feel weird that our online activity can be sold as data? Are we almost signing up for a scientific study of behavior?
https://fourweekmba.com/spotify-business-model/
https://bigthink.com/technology-innovation/is-spotify-spying-on-you?rebelltitem=4#rebelltitem4
https://reclaimthenet.org/spotify-monetizes-data-about-users-moods-to-advertisers/
This is interesting because I have always weighed the pros and cons of one music service after the other, (such as amazon music vs. apple music vs. Spotify) asking myself what benefits I will receive and therefore which one will give me the most satisfaction. However I have never thought about how Spotify and other music services make money through the selling of data, and this brings on a whole new perspective about the service.
ReplyDeleteI always thought that spottily made their money from the subscriptions and ads. When I heard that they were loosing money I was confused. It interesting that this alone isn't enough money for them to break even. It is clever to trade the data because that is a big business and can make a lot of money.
ReplyDeleteI am actually glad that Spotify collects data. I think it's really interesting to know information like that. I'm sure some people would not approve or would at least like to be asked for consent (though it is probably in Spotify's terms of service agreement), but I actually enjoy it. I like Spotify's personalized data collection and analysis with features like the annual summary of what I listen to, or showing my most-listened to genres and songs. I'm curious as to how the sale of data works and how companies use the data.
ReplyDeleteI find the way Spotify collects data very interesting. We see that through the personalized daily mixes, end of the year playlist and song suggestions. It was cool to see how my choices in music have changed since I started using Spotify around five years ago. I wonder if this is how Apple Music also makes money as they have a similar design to their streaming service. I also wonder how much money Spotify is able to sell this data for. I personally am okay with Spotify collecting data about the music I listen to because then they recommend artists or songs that are similar to others.
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