Customer Service of Spotify Research Assignment (Research Paper Sample)

Customer Service of Spotify
Student’s Name
Institution Affiliation Customer service of Spotify
Executive summary
Online music streaming services offer users across the world to access and listen to a wide range of music freely. Although the services started with the development of the internet, they are now being viewed as the future of music industry. Spotify is one of the largest online streaming companies with over 60 million subscribers across the globe. The company founded in 2008 in Sweden has now grown to constitute over 2000 employees and is valued at $13 billion as at 2017.
Throughout the report, the discussion will include the characteristics of the Spotify company and its relationships with other stakeholders in the industry. Also, the discussion will include the key strategic issues and how they have contributed towards the success of the company. Lastly, the report will conclude with recommendations for the company’s future.
Introduction
Spotify is a music streaming service founded in 2008. The service company provides music from recording labels to listeners who are subscribed to the service. The company then pays the artists according to the number of times the music content is played or streamed through the service. Spotify which started as a startup in 2008, has grown to an audience of over 60 million subscribers by 2017. The services offered by the company to artist has gained recognition from artists who now view the streaming company as an alternative means of getting compensation for their rights to music content apart from the companies paying based on the number of sales of the music content (Swanson, 2013). Spotify and other online music streaming companies play a significant role in the music industry and will determine future changes in the industry. The continued growth of Spotify however, can be attributed to its customer service obsession, and its relationship with players in the music industry. This research will analyze Spotify’s customer service as well as its relationship with stakeholders in the music industry.
Spotify Service function relationship with stakeholders
There are various stakeholders in the music industry, i.e., from the artists who own rights to the music contents, music consumers to other music distributing companies. Thus, to remain relevant in this industry, the Spotify company has developed various relationships with key stakeholders to enhance easy access to music and increased interaction and outcomes to the business. The Spotify company runs an online music streaming service; thus, much of its platform targets include millennials who are techno savvy. The need to form partnerships is to help the company to Some of the key stakeholders include;
Social media companies
Despite the Spotify company having online services, the company’s growth after its launch to the public in 2008 was slow. The number of subscriptions was limited after the company had suspended it free registration in 2009. However, to attract more consumers, the company formed a partnership relationship with Facebook and Twitter social media companies in 2011. The partnerships, especially with face, was to increase the number of users through free Facebook registration and invitation. Facebook, on the other hand, was to benefit by having active members who used Spotify on its platform. The relationship worked, and the number of subscribers to Spotify increased by 2.4 million. The number of subscribers using the twitter stream service also increased by 250, 000. Partnering with social media companies was a strategic move for Spotify, and it helped increase the company’s income and competitive advantage. For instance, the company was valued at $1 billion by June 2011.
Relationship with music artists
The relationship between Spotify and music artists has been bitter sweet with some artists condemning the company of destroying music sales while others praise its payment criteria. Spotify pays artists per play of music content. The music can either be played in its premium service or ad service. However, many artists in the past have considered the payments as being meant to devalue music. For instance, in 2013 and 3014 artists such as Thom Yorke and Taylor Swift criticized the way the streaming company compensated artists leading to their withdrawal of their songs from the Spotify. Yorke, for instance, stated that the company was not committed to pay new artist as the artists had to get millions of views to make good money from the company (Spotify’s Plan To Win Over Anxious Artists–And Win The Streaming War, 2017). Taylor swift, another international artist from the US, removed all her songs from the stream service company citing that compensation issues. The company compensates artists between $0.0012 to $0.00065 per song play.
However, some artists artist especially the new artists view the platform as a one that increases their fan base hence increasing their earnings. Spotify also claims to provide music artists with fan targeting data. The Spotify goldmine data is important in the music industry as it helps the artists to precise data to help the artist make informed decisions regarding their career growth. Indeed, recent relationships between the company and music artists such as the Weeknd and Katy Perry indicate a renewed relationship aimed at supporting artistic work on individual levels.
Relationship with the recording industry
Recording labels and music managers are other important stakeholders that the company has built relationships with. In an attempt to build strong relationships with the recording industry, Spotify created a means to interface, artists, and managers as well as the labels to ensure the international promotion of artistic works (Ospanov, 2016). The creator services headed by Troy Carter helps to collect data concerning concert venues, new music, label and managers’ contributions and transmit the data to the over 100 million subscribers. This has helped make the work done by recording labels easier boasting impressive improvement to all stakeholders in the industry.
Strategic issues impacting to the success/failure of Spotify
The journey to success for the Spotify service company has not been easy. The company almost collapsed in 2013 following a series of strategic issues that failed to materialize. However, the company picked itself up, and by 2014, it managed to penetrate the US market. Like any other corporate business operating in various countries, the company was faced with various external environment issues that would determine its growth. Some of the issues include;
Competition
The Spotify company operates in the online music streaming industry which has other players such as iTunes from the apple company, rhapsody, and Pandora among other big players. This is thus a strategic issue of concern to the Spotify company considering players like iTunes ad Pandora have a higher competitive advantage of the company. The Pandora streaming radio has the highest awareness rate at 71% followed by iTunes at 47%. The Spotify stream service comes in at 28% awareness. However, in this competition, Spotify has the largest number of music and second in the number of subscribers. Thus, Spotify has strategically placed itself to address issues regarding competition and maintaining the competitive advantage in the industry.
Economic factors
Economic factors play an important role global business. Economic issues across the globe form part of the company’s weaknesses and may contribute to its failure. For instance, during the early stages of Spotify’s operations, the company operated in Sweden and European market. This, however, was not enough to keep the company afloat due to low technological advancements in eastern Europe. The company thus had to move to London from Sweden where t now commands a subscription base of over seven million. Also, the company success in 2011 when it penetrated the US market where there are a large subscriber base and advanced technology.
Customer portfolio
One of the major external issue leading to the success of the Spotify company is the way it handles its customers. Since the company’s foundation in 2008, the service has seen an increased number of customer subscription that has surpassed earlier companies in the industry such as Pandora (Wind, 2016). Its success following the large number of customer base is based on activities such as;
Customer obsession
This activity by Spotify involves continued customer insights and research to increase consumer experience. Spotify treats its customers as partners and co-creators (Beuley, 2016). This has led to increased customer participation and collaboration.
Pervasive innovation
This activity by Spotify aims at innovative engagement, i.e., the company tries to be all inclusive in its innovations to ensure extended reach to its customer. The pervasive innovation involves partnering with other parties such as individual DJs, and parties such as uber to have an extended reach to its customers. The uber partnership, for instance, helps users to listen to Spotify while using the uber rides.
Spotify’s personnel management about its current performance
The growth of the Spotify company is also attributed to the way the company manages its personnel. The personnel management at Spotify has adopted a process that ensures scalability and painless growth. The management principle thus includes;
Employee autonomy
The company maintains feature teams that perform end to end tasks. The features teams at Spotify which is also named “squads” are responsible for processes from beginning of development till delivery of product (Weijters, 2016). The autonomous personnel management is important to the gro...