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This Take Home Exam is going to talk about how Spotify as a business in the Music Industry from one of the 9 Creative Industry subsectors stand as a business in the Digital and technology areas. It is also going to explain the output and how it is going to make money and interconnect it to a different product in the TV streaming industry. Lastly, it is going to discuss how technology has changed some products by distributing and consuming in the now a day society.

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1. Describe your chosen business?



On 7 October 2008 a music, podcast and video streaming service was officially launched this was Spotify it was formed by Spotify AB in Stockholm, in Sweden. Spotify gives you a digital rights management–protected content from record labels and media companies.  Spotify is a free website with lots of advertisements but to get all the good packages you must have a membership to get all the best deals and discounts, that comes with it which is an offered via paid subscriptions. While a member you have improved streaming quality and music downloads and fewer advertisements. The majority of people that Spotify is available to are most of Europe people, most of America’s people, most of Australia people, most of New Zealand people, and some parts of Asia. You can access it on most smart devices such as Mac OS, Windows, Samsung Phone, iOS and tablets and Android smartphones. You can also browse your favourite Music by searching using the parameters such as genre, album, artist, record label or playlist. There are about 30 million songs provided to Spotify, you can search for your favourites genres such as Pop, R, Hip Hop, Funk, and many more.

Spotify membership subscription is a type of way for Spotify to get a big amount of money, while Spotify is free to launch but does not come with everything free there are some things in Spotify you have to pay for to enjoy the full launch of the streaming service.



Spotify has started a brand new website named Spotify for Artists it started in December 2013, this has defined the business model and income data. All of Spotify’s content is from major record labels and also independent artists, they also have to pay the copyright holders royalties for streamed music. Spotify pays approximately 70% of its total income to rights owners, they also say that  “Spotify for Artists” do not have a set per-play rate but they consider factors like the Customers home country and the artist’s royalty rate. The common payout in Spotify is earned between $0.006 and $0.0084 to the rights holders per stream and the membership subscribers payout is higher. (Wayback.archive-it, 2013)




Spotify has so many reasons to be the number one music streaming app in the world, some of the pros of Spotify is that it covers all the floors of music in digital  devices such as Windows desktop, iOS, Roku,  Samsung Smart TV, PlayStation 4, PlayStation 3, Windows Phone, Mac OS, and many more. Using Spotify is really simple, you can listen to any song that you want as many times that you like, you can Build your own playlists with your favourite song or albums.  You can build your own playlists with your favourite song or albums unlike other music streaming services like Apple Music, Deezer, SoundCloud, Pandora, Tidal and Amazon music you can get a free subscription plan you don’t have to pay to listen to your favourite song you likely to find all or nearly all of your favourite song in Spotify.

Spotify limits the free subscription to get the full plan you need to have a Premium subscription this would not affect the company because of Advertisements in the free plan.  The free plan the sound quality is about 160kbp while in the Premium plan it is 320kbps. You cannot download music in both free and premium plan as MP3 files and the Premium service is able to stream offline. (sidify, 2016)

2. Discuss 3 characteristics of the creative business


According to (The Swedish wire, 2009), Swedish Spotify carries a value of $250 million the business, it made a loss of 31.8 million Swedish kronor (£29.2 British Pound) In 2007. 18 percent of Spotify is owned by record labels such as Universal Music, Warner Music, Sony BMG and EMI and Merlin.   Spotify publishes in September 2016 that they have paid the music industry $5 billion. between June 2015 – Sept 2016 Spotify average in a month was $133.3m rights holders to approximately $4.4m every day, Spotify pays the rights holders $1.2bn in 2016.(Music Business Worldwide, 2016) According to (Kafka, 2017), Spotify renegotiated their licenses with Universal Music Group and Merlin Network this gave Spotify a financial filing to pay more than $2 billion in the next two years. Its revenue grew more than 50 percent to $3.3 billion for them to grow the music streaming business pays billions of dollars to the music labels in the next two years.


Spotify obtained $100m in funding for the online music streaming service it now sees the company valued at around $1bn. According to reports, Spotify CEO plans to use new fundings to launch the service within the US business The plan for Spotify in the US business was to sign licensing deals and it was lifted now they have three of the four big music labels. Spotify knows that the US business is hard to break through, knowing that the competition is struggling following its IPO like Pandora. (Web Archive, 2012) Spotify is one of the larger tech startups to go public in 2017 however thing looks like it shifting. Other businesses like TechCrunch are aware that Spotify is considering a plan to delay an IPO until 2018. This will give Spotify more time to build up a better balance sheet to improve their margins. (Lunden, 2017)



3. Explain the interconnectedness of the creative industries



The connection between Spotify streaming in the music industry and the TV streaming in the TV and Filming Industry is that a lot of TVs have started to use Spotify to stream the there music and to go on free on the internet. TV brand like LG, Samsung, Sony, Toshiba, Panasonic even Mac OS and iOS, in fact, every digital technology like PlayStation, Windows, Android and more you can obtain Spotify.  Spotify is at works in the future to crafting video new formats that are unique to the music streaming. In the last few years, Spotify has been trying to carve out its own niche in streaming video and try to claiming ad dollars from popular TV to build its video platform. Within the TV industry, Spotify is invested in existing channels like Comedy Central and ESPN.  Spotify is first a music service but the Swedish organization has tried different ways to generate advertising sales to entertain users and go instead of worrying about the royalty and distribution rates, it passes 80 percent in their earnings. While only 10 percent of Spotify’s customers use the free, advertising-supported service. (Bloomberg, 2017)


4. Discuss how technology has changed the way that creative products are


We are driven by digital technology in everyday life because technology is an influence on people’s communications how they say things and their life habits. Some companies need to know how to use the digital world to have an impact on their industries and be aware of all setbacks. A way of how technology has changed businesses and their products is by Instant Communication with the customers, away businesses do is by using Social media and it allows companies to interact with the customers to promote their products. Another way some Business connects with their customers is on Facebook which has 900 million global users the majority are teenagers.

Another way that technology has changed businesses is that it gives you too many content overload, some businesses marketers have their work cut out because it is hard to get your message and brand products out there according to (Allen, 2017) “Every 60 seconds 3.3 million people make a Facebook post, and 29 million messages are distributed via Whatsapp.”  It is hard to be noticed by the customers that are using these applications.

Many customers want to know about the companies that there are spending their money on, this allows companies to build loyalty within the customers. There is 12 percent of customers that trust companies with the information in the product while 67% believe that it is up to the brand to provide the information.  Some companies know that social media marketing should be the first thing in any company’s marketing strategies.

companies are aware that Modern technology allows marketers to obtain a large amount of information about their customers but for them to have the best ways to achieve is by Understanding which customer channels will pay off, like for a brand that needs to focus on their customer engagement within a significant way to build a relationship with the customer and a brand. (O’Brien, 2017)





The communication between the customers and the companies has come a long way. In the past, company provided customer service by emails and phone calls but those communication devices are out of date and hard to get favour from the customers. But Social media is the way forward with live chat which you are interacting with your customers to keep your brand status if you do not interact with your customers you are at chance by damaging your brand reputation with millions of people. To go about it is by having a large-scale data collection supply which can help you by tracking your research by using the big data. (Iyoob, 2017)




5. Make recommendations


How Spotify can improve their business is by discovering new music out there, Spotify isn’t excellent at discovering music it has about 30 million songs. for them to achieve this Spotify need to be less similar to other music players and like a music buddy which means pushing new music that you like or based on your taste, and introducing new similar tastes like for example different genres like well know gospel music, well know country music, well know blues music in the 50s-90s, well know Hip hop and many more.  Another thing  Spotify need to do is having a website that does the same thing that the download version does, it’s easier for people to go on Spotify without downloading the app on your computer. Another thing is that you can save any music from YouTube to the Spotify app. A rating system is also needed unless you are constantly creating playlists which are hard to do because of the 30 million songs they have and there is no way to keep track of everything, you shouldn’t need to listen to every song when you discover that new artists. Also, Spotify needs to have a ‘Love it’ button and the rating system should be a 5 stars system, 5 being the highest and 1 the lowest.