What makes Spotify so successful and why are there so many artists that sell their music on Spotify? At the heart and soul of why Spotify is so successful is the fact that they chose to build the company around user experience over commercial opportunity. Users are fans, and these fans love to tell people how much they love Spotify.
Going back more than a decade, Daniel Elk and Martin Lorentzon (co-founders of Spotify) had seen the rise and fall of Napster, the pirate download model that was eventually sued into oblivion by the US music industry in 2001. Elk believed that people did not want to be music pirates, but that they wanted to have access to music in a quick and easy format from your home. Looking at some of the finer details you can see how Spotify’s team of engineers worked hard to make sure every song you streamed happened at such a speed (less than 250 milliseconds) that it appeared that the music was actually on the user’s hard drive. This focus on user experience developed into a brand for Spotify, including features that allow you to curate your own playlists and then share these with friends.
The next evolution with Spotify came in 2019 when Discover Weekly was introduced on Mondays for all Spotify users. This was the algorithm at its very best. By understanding what each individual user enjoyed in terms of genre, mood and taste in music, Discover Weekly would send a curated playlist of 30 songs to every user, every Monday morning. This introduced new music to Spotify users, keeping their playlists fresh and interesting. The stats on this were amazing as well – 5 billion songs shared to over 40 million users in the first year alone. This was a massive hit, and yet again the user was being put at the centre of the Spotify experience. This also helped many musicians gain new Spotify followers.
Go forward a few more years and Spotify has now incorporated podcasts and video content. This led them to work on projects such as “Black History is Now” collaborating with artists, creatives and organisations to tell stories through curated playlists, videos and podcasts. The user experience was now not just about creating your own story, now you can listen and hear the stories of others that have been professionally curated for audiences to share and discuss. It is taking our culture to a new level, in a digital world, where sharing information and gaining a better understanding is the beating heart of our communities.
What about the commercial side of the business, is it competing? If you look at Spotify’s competitors, Apple Music and Amazon Music Unlimited, Spotify is the only company to offer a freemium model alongside a premium model. The fact that anyone can use Spotify and many of its features for free gives a massive competitive edge, whilst also ensuring the company always has a visible pipeline of potential subscribers right on their doorstep. From a commercial perspective, this is a highly successful model and as long as they continue to convert their Freemium users to Premium subscribers, then Spotify will continue to grow and be the largest music streaming service.
The conclusion is that you need to create something that customers need, and when the users love it, you are going to be successful. In industries such as social media, where TikTok has taken a user centred model, and algorithm, and has just surpassed one billion users. The internet gave birth to consumers having more control, and soon after consumers became users instead. Long may this success story continue, and to all aspiring business start ups for the future – consider your user experience as much as your P&L. It pays off in the end.