Spotify company evaluation of success

6 million in funding from Northzone, Li Ka-Shing, Creandum and Horizons Ventures. This is one of the companies known for its agile transformation. Agile transformation requires no particular road, and none can easily understand the desired measures necessary for its possibility. The agile transformation of Spotify saw the disruption of the video streaming service, the music, and podcast. There was a massive change in the way in which the people started to understand the use of music and the discovery of music (Sun, 2018). One year later, 2012 the company had rapidly grown, and there were over 5 million subscribers among 20 million users. It is as well important to note the increasing number of investors that the company was attracting at the time. For instance, there were Digital Sky Technologies, Accel Partners, Fidelity Ventures, Goldman Sachs, Kleiner Perkins Caufield and Byers, the Coca-Cola company, AFSquare, 137 Ventures, and Technology Crossover Ventures.

These investors and other more were largely responsible for the current state of $537. 8 million funding for the company. This has largely contributed to the growth of the company in the whole world. It is worth noting that Spotify has greatly reduced the traditional controversies between the company and the artists over catalog availability and royalty payments (Aguiar & Waldfogel, 2018). The company was an idea that was born out of passion, and this largely explains its success. This is quite evident based on the fact that the CEO of the company, Daniel Ek was a failed musician and outlined the vision of the company. This illustrates his passion for music as well as the passion for music at the company. Additionally, quite a few people especially musicians and music distributors saw the internet impact on music as an opportunity, but rather they saw it as a problem to their career.

There was much illegal streaming of music due to the increasing use of internet in the entertainment industry. Spotify was one of the industries that embraced the changing trends in the industry and took advantage of the internet growth in the community to address the unexpected consumer needs and at the same playing quite an important role in helping the musicians to successfully create market and great music for their supporters in the industry (Sun, 2018). The tools and process at the organization support the company rather than drive the organization. More specifically, the tools and processes at Spotify greatly support the value of agility and change, with the definition of everything. Most companies find it quite easy to use partnership linkages to experiment as well as coordinate them via new technologies even at the extent of crossing the boundaries of the industry.

Formation of partnerships between companies such as Uber and Spotify are essential in hunting new business opportunities to bring in the existing products into new experiences of their customers (Maftei et al. Therefore, such partnerships are important in enhancing the existing services and products in quite new ways. For instance, personalization of an individual’s taxi experience with the music choice of an individual. Partnerships are capable of creating value through new experiences of the customers by shifting away from the conventional thinking regarding the process of production, the necessary related steps and the determination of who can do it more effectively and efficiently. The service provided at Spotify filled a major gap in the industry. It is quite evident that none had ever successfully created a customizable playlist before Spotify was created.

The Spotify service provides over 20 million songs availed to the consumers irrespective of whether they are subscribers or not. The people who are able and willing to pay for the service get almost the same service, and the only difference is the advertisements. Moreover, all the revenues received from the advertisement are divided between the company and the artists. It is quite important to note the manner in which the Squad has to align with the mission of the Squad, the short-term goals, and the product strategy. Autonomy is an important leadership tool for ensuring collective responsibility of the employees. They are tasked with the role of initiating overall organizational contribution. Besides, the group works with purpose, mastery, and autonomy. Autonomy plays the role of motivating the employees to come up with fast and great stuff for the company.

The company’s structure is made of different squads. Each squad has a tribe, and each tribe of the squad has a chapter. This allows any employee to change the squad without necessarily changing the manager. The charts of the organization are quite illusional, and the main focus of Spotify is the community over the structure rather than the structure involved in the hierarchy Maftei et al. This is based on their belief that the volume structure is not quite necessary for a strong enough community. This increases the market platform as well as the promotion of service access and increasing the network value. These significant features are largely responsible for the attention that Spotify gives its users, increases the value to the advertisers, increases the network and make the parties involved powerful and profitable (Jakobsen, 2018).

Music Database and Licenses The company is reported to have gone to the extent of approaching several managers of different artists for direct licensing of their music. This pushes the company to ensure direct payment of the royalties to the particular artists, and thus reduces the percentage of the revenue share under the distributor or label agreement. This move is a quite interesting approach for the company and extensively helps the company in the reduction of its royalty bill. There has been a drastic reduction of the support interactions needed for the management of the Spotify machines. It is as well important to note the significance of the collaborative filtering as a primary strategy for the recommendation of music to their listeners.

This involves the company paying much attention to the songs listened by the listener, the favorites and the individual playlists of individuals before cross-referencing with other listeners. This makes it quite easy for Spotify to recommend songs to the listener depending on the tastes of the listener. Distribution on different channels Spotify started as a quite disruptive force in the industry. The universal integration of Spotify with other companies is quite important for its continued success in the music industry. A lot of deals have been made by the company with the car manufacturers as well as a multiyear Samsung partnership. All these deals are important for the growth and success of the company. Partnerships and co-marketing as used by Spotify in connection to the publishers have greatly ensured the increase of its global reach.

This has involved embedding different widget formats on other different sites (Schulze et al. Moreover, quite a few companies to keep their promise to their customers. The vision of the company is actionable, clear and specialized. This is not a vague or unrealistic vision but rather a quite precise, focused and actionable vision that the company can achieve. A focused, actionable and clear vision of the company is quite beneficial in the decision making and priorities of the company (Urbinati et al. Procurement According to Jakobsen (2018), the most interesting aspect of the company is its procurement procedure. Similarly, the US launch by use of private “Beta” invites was essential in creating a buzz as those as those with much access and shared in social media as well as through word of mouth.

Technology Development Technology at the Spotify company is as well responsible for its success in the industry. This should first be understood on the basis that Spotify is not a music company but rather a tech company. As a tech company, it is tasked with the responsibility of collecting and analyzing data as a primary tool essential for programming and curating the best possible music playlists as well as algorithmically driven music. Some of the company’s strategies responsible for its success include the creation of the Spotify for Artists platform that offers quite a range of broader features. On the contrary, the company has employed a new mechanism of, “The more you play, the more you pay. ” This makes it easy for the company to improve the experience of the freemium users.

The fact that the company was started in Sweden rather than other famous developed countries, the company has had the full opportunity of ensuring organic growth of the country by country (Schulze et al. Large Network and Infrastructure The successful establishment of a steady market by Spotify is quite evident. The company is currently available in the 57 nations worldwide. However, the company does not stop here still; and instead has gone to the extent of targeting the three billion people across the world that are still listening to the radio. Moreover, radio music is gradually disappearing and being taken over by music streaming in the music industry. Strong Brand Reputation Spotify company has done far much than just leveraging the network company and power to do better than its competitors.

The company has ensured a fine better reputation than its competitors through offering a quite free service in comparison to the illegal downloading that was quite common. The rate of illegal download of music has rapidly gone down to about 13% (Schettino et al. For instance, there are many repetitive commercials particularly advertisements such as an advertisement for the subscription of the Spotify Premium. Although the advertisements are essential for the generation of revenues for the company, other digital streaming organizations allow their customers to listen to their music and stream yet they had quite a few commercials which do not disrupt the peace of the customers. A typical example of such company is Songza (Schulze et al. The company should, therefore, take advantage of the large monthly royalty payouts to effectively cut back on ads and commercials that interrupt their loyal customers while listening to their songs at their favorite time.

This move will ensure that the customers of Spotify do not move to other companies capable of satisfying their needs at quite low costs and fewer interruptions by ads. Legal download ensured that the artist was paid before the customer downloaded the song. The legal download allowed the artist to understand how much they would expect, and the number of users who downloaded the song. Therefore, the artists receive quite less from Spotify in comparison to the initial payment they received from the legal download they were used to receive (Schulze et al. Nonetheless, the open communication and transparency Spotify has played a significant role in handling the artists and their concerns about their payments. Conclusion Spotify, as a tech company, was not the first company to avail online services of music but it was one of the big innovators in the marketing approaches, subscription and technology options to make it the market leader in the subscription of music in the industry.