Spotify: A Product Case Study


Spotify is currently one of the top music streaming services in the world, and was the driving force behind the industry’s shift to steaming. Spotify has 60 million users, 15 million of which pay for the service, all spread out over 58 different countries. There are 30 million songs available to listen to,  and that number increases by 20,000 every day. In 2015 Spotify users streamed 20 billion hours of music, and half of that was on their phones ( Spotify is dominating the streaming market, and there are a few simple reasons why.

The Basics

If you are in the market for a streaming service and want to understand more about Spotify, this is what you need to know. Spotify is an online music (and recently podcast and video) streaming service with two basic tiers: Free and premium. The free services has a few limitations that I will mention later. Overall, Spotify gives its users access to a massive library of music that they can chose to stream from most internet capable devices. Spotify users do not pay for individual songs or albums like the traditional physical or mp3 paradigm. They pay for access to every song at once, and can listen to any song they want at any time with wifi or a cellular data plan. You can access Spotify using an in-browser web player (less popular), and by downloading the Spotify application for Mac, iOS, Android, and Windows operating systems. Spotify lets you save songs, albums, and artists to your account and organizes them similarly to iTunes and other mp3 programs. Spotify also offers a wide variety of themed playlists for you to choose from if you don’t know exactly what you want, and generates a “Discover” playlist of music you haven’t heard that it thinks you will like every week. On top of all this instant online access, Spotify users can save songs offline to their device when on wifi and listen to them later without an internet connection. All in all, Spotify is a fully featured music service that draws upon a massive library to let users pick what they want, and introduce them to music they didn’t know they liked.

Spotify For Free

use-spotifys-new-free-mobile-streaming-your-nexus-7-tablet-other-android-device-w654Spotify makes its money in two ways: advertisements and subscription fees. Anyone can make a Spotify account for free, but their experience will be slightly different from a paid subscriber. Free listeners have access to all the same music that paid ones do, but they also have to endure advertisements. The ads are relatively invasive and come in a few different forms that vary from desktop to mobile. On your computer inside the Spotify application, free users will have banner ads on the sides, top, and bottom of the window. These static visual ads change periodically. There are also full screen ads that pop up after Spotify has been playing for a while without the user touching the computer’s controls. These ads do not interrupt playback, but obscure the entire Spotify interface and will remain as such until the user closes out of them. Although this seems intrusive, it doesn’t significantly interfere with the listening experience.

Static visual ads only appear on the desktop application, but audio and video ads are implemented on every platform. Periodically while listening to music on Spotify an audio ad will start playing in-between songs. They usually last 15-30 seconds and occur in pairs at most (but usually just one at a time). Spotify also has video ads, but they present them in a unique way. When listening to Spotify occasionally the user will hear a voice say something like “Spotify is brought to you by (company name here). Take 30 seconds to watch a short video about (product name here) and enjoy the next 30 minutes of music ad free!”. The user can chose to opt in and watch the ad, and Spotify delivers the next 30 minutes free of ads. If you wait long enough or opt out, a regular length audio ad for the product will play, and everything continues normally.

Beyond advertisements, free users have a few more limitations. They cannot save music for offline listening, and must have an internet connection to use Spotify. Specifically on mobile devices, free users cannot play specific songs on demand. They only have access to shuffle mode, and can pick what they want down to the album or playlist level. Lastly, free users can only skip 5 songs per hour. Depending on what the user wants to get out of the service, these limitations can have a varying effect on their overall satisfaction.

Premium Features

For $10/month Spotify users can enjoy a fully functional uninhibited music experience, and this is where the service really shines.  First, premium customers do not have to see, hear, or watch any ads whatsoever. The screen real estate taken up by banner ads is free and makes the interface a lot less cluttered, and listeners will never be interrupted by a single audio or video ad. The benefits of this feature are clear, and it is the most well known understood upside to paying for Spotify

The second group of premium features is related to basic playback functions: premium users can listen to any song they want any time, are not restricted in the number of skips they have, and can save music offline on any device to listen to it later without internet. These features are what make Spotify a complete mp3 library replacement, and are best described with a hypothetical scenario:

Consider John, a UConn student, Spotify premium subscriber, and avid music listener. John’s friend tells him about a song he heard on the radio that he thinks he will like, and tells him to look it up on Spotify. John is in his dorm and connected to wifi, and looks up the song in the Spotify app on his iPhone. It is by an artist he has never heard before, but he trusts his friend and listens anyways. John likes the song a lot, and decides he wants to hear more of what that artist has to offer. He navigates to the album that the song is from, and saves it to his phone for offline listening. John has to leave soon and drive for two hours to get home for spring break, and this album is one of several he has saved to his phone so he can listen to music in the car without using data. He starts out his drive by listening to the new artists album, and quickly realizes that it is not for him. He switches to something else that is saved offline, and deletes the new music from his phone as soon as he arrives home.

offline-spotifyIn this scenario a Premium user is able to pick a specific song that he wants to listen to, play it on his phone, save the entire album offline and listen/skip through it in order and in the car without using any data, decide that he doesn’t like the rest of the album and remove it from his phone. Spotify premium revolutionizes the way people try out new music, because there is no risk. I can not know who John Mayer is, learn who he is and instantly start listening to his songs on demand, skip the ones I don’t like, save his entire discography to my phone and listen to it nonstop for a month, and then get burned out on his music, delete it from my phone and never listen to him for the rest of my life. Before Spotify, that entire process would have cost $80, and all of that money would have been wasted after the month of manic listening was over. With Spotify I can pay $10 and do that with John Mayer, and 10 other artists all at the same time (provided I have enough time to spare and storage space on my phone) and not waste a single cent.

Suggestion Box

IMG_0323Most media technology these days tend to have some kind of feature that predicts what you want based on your consumption habits, and/or offers simplified categories/playlists for those who don’t know exactly what they want. Spotify performs both of these duties quite nicely with its basic playlists and innovative ‘Discover” playlist. Spotify has a wealth of traditional playlists to offer based on a wide variety of criteria. They have the basic genre based playlists, and a selection of “charts” such as US top 50, UK top 50, Viral top 50 etc. They also have a number of more interesting playlists generated based on “moods” and activities that are associated with music that don’t lie within a specific genre. Some examples are: Chill, party, running, workout, sleep, fresh finds, focus, decades, travel, romance, and dinner. Each of these categories contain subcategories and
IMG_0320playlists that are more specific, for example within “dinner” there are 29 different playlists, dinnertime acoustics, jazzy dinner, dinner jukebox, picnic in the park etc. Each one is cultivated to create a category of music that makes sense to you, but you never could have imagined existed before. Spotify does an incredible job of helping users that don’t know precisely what they want find the perfect playlist to suit each moment. These in depth categories reinforce the idea that music can not only be its own activity but can follow you into every other thing you do, and gets Spotify users listening to even more.

Although these playlists seem fairly innovative, the Discover playlist is far and above the most impressive. Every Monday each Spotify user is given a 30 song playlist generated based on their listening activity. The playlist is composed of music that Spotify thinks the user will like, and does not contain anything they have listened to on the service before. Spotify has some algorithm that keeps track of what you listen to, categorizes it using a
bunch of different metrics, and then finds 30 new songs per week that you should like. In my personal experience the Discover playlist always contains music that I enjoy, and doesn’t just reinforce my genre preferences. I find that a few songs each week are clearly outside of my normal listening realm, and are attempts to introduce me to new music similar to but outside of the genres that I listen to. This is the most impressive part of the Discover playlist, and demonstrates that Spotify truly aims to widen listeners’ horizons and not just give them more of exactly the stuff they like to keep them coming back for more.

Features You Haven’t Heard of and Might Not Care About

There area few things that Spotify can do that aren’t useful very often, but are still pretty cool and worth mentioning. You can connect Spotify to social media and choose to have it notify your friends/followers what you are listening to at any given moment. Spotify can also connect to your existing iTunes music library, and if there is a song you purchased and have on your computer that isn’t available on Spotify, you can add it to your music in Spotify and even save it offline on your phone within the app. The app and desktop client also interconnect in a few more interesting ways, the most notable of which is the Connect feature. You can use the Spotify app on your phone to control it on your laptop and play m
usic from there. So if you are hosting a party you can plug your laptop into your speakers and curate the music selection from your phone as long as there is wifi. Lastly, Spotify allows Premium users to choose a higher bitrate for for their streaming and offline files if they want to. This feature is somewhat useful for audiophiles interested in always having the highest quality possible, but for casual listening I recommend keeping the bitrate relatively low to save data, bandwidth, and storage space.


Spotify has the capability to be a one stop all inclusive music listening solution, and can meet most people’s needs. It has all the casual suggestive options of a service like Pandora, and the selectivity, customizability, and portability of a personal mp3 library. The final piece of the puzzle for Spotify is a detail about they pricing that sets them apart from Apple Music and other comparable services: They offer a 50% student discount to anyone with a .edu or other higher education email address. This is a HUGE plus for college students like myself who otherwise may not have paid for the service. $5/month for unlimited access to 30 million songs is a pretty sweet deal. Spotify is leading the music streaming industry in almost every respect, and it is likely they will continue to do so.


By the Numbers: 43 Interesting Spotify Statistics (February 2016)


Online Music Streaming’s Impact on the Music Industry

The music industry was born out of technological change, and it owes the immense growth and change it has experienced in the past 100 years almost entirely to new tech. There are many important technological developments that serve as bookends to periods of evolution in the industry, each signaling a decline in usage of one medium, and the introduction of a new one. Each of these landmarks in time (all discussed in the previous post) introduced new infrastructure, changed consumer habits, and altered the market drastically. The most recent tech-based development in the music industry is online streaming.

Streaming and Radio

Before the introduction of music streaming services in the mid 2000’s, music consumers had two options: Pay to own a copy of a song/album, OR steal it. As a matter of fact, all avenues for getting music since the inception of the industry have involved acquiring (legally or by other means) copies of the songs, with one exception: Radio. Radio has definitely been impacted by the introduction of streaming, and at first glance it is easy to see streaming as a direct replacement for radio that has been adapted to the internet age.

This is a fallacy, and the two share a few important differences. First, radio is not customizable and involves little consumer choice. You can change the station and perhaps call in a request for a song, but that is the only control you have. And despite those options, radio stations pick genres based on what is popular, and will only play the “hits” in that genre. This is because radio doesn’t make money from the consumer, its revenue comes from advertisers. This is the second important difference: Streaming is user oriented and radio is audience oriented. Streaming services by definition want to provide the perfect listening experience for each individual user; they cater to the individual tastes of everyone separately. This motivates them to have the widest most comprehensive selection to pick from, and to incorporate features that introduce users to new music they could like. The radio industry has to cater to the collective average of everyone’s tastes to attract the largest audience, and the highest paying advertisers. They don’t want to offend or alienate any listeners, so they play what is popular to attract the masses. This makes radio a medium that doesn’t offer much variety.

CD’s and Mp3’s

stack-of-cd-casesSo what was everyone doing to get their music digitally before streaming started to appear in 2007? Largely due to internet file sharing, digital and physical album sales dropped steadily from the start of the new millennia up to and past 2007 (according to Pew Research Center). By June 2007 the number of computers with peer-to-peer file sharing software installed was almost 200 million. The industry was taking a hit, and the government struggled to create and enforce laws that would save it. Large media corporations lawyered up and attempted to prosecute as many guilty individuals as they could, but such lawsuits were too costly and were largely dropped by 2009. Although it is still illegal to steal music online, individual users realistically aren’t at risk for any legal action. The industry continued to bleed as young music lovers continued to find cheaper (free) ways to get the music they wanted when they wanted it. This problematic desire for cheap/free and easy access to unlimited music had no legal solution until streaming was introduced.

iTunes circa 2007

For those who were still paying for their music, there were a few popular options besides buying CD’s in person or online. Apple introduced their online mp3 store iTunes in 2001, which used proprietary anti piracy software to prevent songs downloaded from iTunes from being played on more than 5 authorized devices. This allowed small groups of friends or families to share iTunes purchases, but stopped the flood of iTunes files onto illegal sites. By 2007 iTunes was completely Windows compatible, and Apple had a full line of mobile devices to meet a variety of user needs.

In early 2008 entered the online mp3 market, and was the first company to sell DRM (digital rights management) free files online.  Amazon seemed like the perfect place for everyone who didn’t have an iPod to get music, and it still fulfills that role today. Also in 2008 Microsoft launched a line of portable media players called “Zune” which had its own online store; this project failed within 3 years and the online store was absorbed into the Xbox store.

Two Types of Streaming

635861717299597744460943910_pandoraThere are two basic types of online music streaming: The first mimics radio and improves upon it, and contains only one company, Pandora Internet Radio. Pandora’s service is based around a massive music metadata database, and an algorithm that can create a “station” based around user input. Users pick an artist, album, or song that they like, and Pandora creates a playlist that it thinks the user will enjoy, and may or many not contain the actual content of the original input. Services like this are for a more passive listener, one who doesn’t particularly care to listen to specific songs or albums, but instead wants to hear a mix of music they’ll enjoy without having to create that mix themselves. This is a service that, besides the need for an internet connection, could usurp radio. Its basically online radio that promises to deliver exactly the stations you want, based on your precise preferences for genres and artists. In the future it may be commonplace to have a Pandora enabled stereo in your car. Pandora can be used for free with occasional ads, and the cost of removing those ads is a mere $4.99 per month.

Streaming GraphicThe second category pertains to services that can replace online mp3 stores. These services, such as Spotify, Apple Music, Tidal, and Google Play Music, offer massive libraries of content and let their users stream whatever they want whenever they want. Every one of these services (except Tidal) has a free tier and a paid tier. Generally the free tier has occasional 30 second ads, among other limitations. For example, when using Spotify for free on a mobile device, you cannot play specific songs on demand, and everything plays in shuffle mode. For around $10 per month you can have an ad free listening experience, and save songs offline for future listening. This means that if you think ahead, you can make full use of the services paid for in areas without wifi without using tons of data. And once you aren’t listening to a particular song or album very frequently anymore, you can remove it from your device to free up room for new music. Every company has found a way to make this download system secure and impenetrable; songs downloaded offline never leave the safety of the proprietary app and therefore cannot be copied and distributed elsewhere.

Stream Me Up, Scotty

Paid online music streaming services are fundamentally different from any other way to get music, because they allow consumers to listen to exactly what they want without having to own it (video streaming websites like Netflix and Hulu have inflicted similar change upon the film and television industries).  Instead of shopping in person or online through a catalogue of music, consumers pay a monthly subscription fee to receive unlimited on demand access to the same selection they used to shop from.

This shift from paying for ownership to paying for access has several important implications. In the technical realm, streaming emphasizes the importance of fast wireless connectivity and processing power rather than storage. In the realm of mobile tech there has always been an emphasis on increasing storage capacity. In fact this has been a trend in computing overall; as we seek higher fidelity digital representations (higher pixel count/fps, lossless audio files etc.) we need more space on our devices to store these files. For example, Apple has consistently upped the storage capacity of their devices over time. The original iPod (released October 2001) sported a bulky 5GB hard drive, and the most recent Apple devices have solid state storage (which is physically smaller, more stable and reliable) at up to 128GB. This race for more storage has made sense so far, but it may come to a halt if streaming takes over. A Spotify customer doesn’t need a lot of storage to take their content on the go. They need a device and network (wifi and/or cellular) that has the bandwidth capabilities to get them their content when they want it.

The introduction of streaming to the music industry has also brought into question the worth of a song, and the way streaming companies pay the artists has been widely discussed and criticized. Before streaming it didn’t matter what consumers did with the music they paid for; once they purchased music their use of it didn’t effect revenue for retailers, labels, or artists. This has one notable benefit, because some people could buy a CD and only listen once, and the full “worth” of that CD still ends up in the pockets of those responsible for creating it. With streaming each user’s listening activity after paying for the service doesn’t effect the streaming company’s revenue, but it greatly effects how much record labels (and in turn artists) get paid. Different streaming services have different ways of calculating how they pass on subscription or ad revenues, but all of them somehow determine that based on play counts.  This shift can also be described in terms of “interest”. When someone purchases a song, those selling it only have to depend on that customer’s initial interest in the song. With streaming, payouts depend entirely on continued interest in the form of repeated plays. To make the same $10 they used to get from selling a CD, artists now depend on a steady stream of new listeners, and the continued support from them.

Overall, streaming makes sense for the industry in its current state. People can illegally download or stream almost every form of paid media that currently exists with virtually no legal risk, and a low cost on demand streaming service is the only solution to that problem. Companies like Spotify, Apple, Google, Tidal and Pandora have fundamentally altered the way the music industry functions, and serve a vital function to keeping it alive.


Grant, A., & Meadows, J. (2012). Communication Technology Update and Fundamentals(13th ed.). Hoboken: Taylor and Francis.

The Music Industry (a brief history)

Since its inception the music industry has experienced countless changes and revolutions, and technology has always been the driving force behind that change. Up until the late 19th century there was no “popular music” as we now it today. Music was reserved for religious use, otherwise only available to those who could afford to see an orchestra or played/sang themselves, and only disseminated in the form of sheet music. Composers wrote music down, and in their written form notes and rhythms could be sold, read, and performed for paying audiences. Pen on paper and notes ringing in a concert hall were the only forms of music until the turn of the 20th century.

An Industry is Born

In the early 1900’s two new innovations came onto the scene that kickstarted the music industry: The phonograph and radio.

In 1877 Thomas Edison invented the first phonograph, a device that could capture the sound vibrations from the air and translate them into groves on a moldable surface, and reverse the process to play it back.  This primitive but crucial first step into the world of recorded sound matured over the next 30 years into something closely resembling the vinyl records and record players we know today. By the mid 1920’s records and record players were a relatively commonplace and affordable way to consume music.

An early gramophone record and player.

The technology that was the basis for modern radio existed in part since 1844, when Samuel Morse sent the first telegraph message in morse code through a wire that stretched 40 miles. In 1888 Scientist Heinrich Hertz discovered that the air around us was filled with electromagnetic waves of varying frequency and proposed that these waves could be used to send messages wirelessly over long distances. In the 26 years that followed Hertz’s discovery, little progress was made. The start of the First World War in 1914 pushed the United States government to pursue innovation in the field of communication technologies, and radio in its modern form was born. After the war had ended, radio waves began being used to transmit music and voice over the airwaves and into people’s home’s.

The Industry Transforms

This Studer A800 24 track tape machine was common in many recording studios.

Following the firm establishment of radio and vinyl records, music industry technology underwent a series of radical changes leading up to present day. Primitive “direct to vinyl” recording techniques were usurped by multitrack magnetic tape machines in the 1930’s, which advanced the field of recording engineering leaps and bounds in a short period of time. Multitrack magnetic tape machines facilitated new recording techniques such as overdubbing (the ability to record once and add more “layers” afterward while listening back to the initial recording) and editing (physically cutting the tape and re-arranging it to fix mistakes or remove sections of songs). These new techniques enabled bands like The Beatles and The Beach Boys to create the iconic and sonically groundbreaking albums that they are known for.

Starting in the 60’s magnetic tape technology was modified and miniaturized into different more portable iterations that consumers could use in their homes and

A typical cassette tape from the 80’s.

cars (namely “reel to reel” and “8 track” players) but the most notable and final advancement in the world of tape was the compact cassette. Cassettes were introduced in the 60’s and finally hit their stride in the 80’s by which point cassette players were standard fare in many cars, and tapes could be played on the go with portable devices such as the Sony Walkman. Finally there was a hyper portable, reliable, and relatively high fidelity format for music. But even greater change was coming.

A Digital Revolution

The final major change in the music industry came with the introduction of computerized digital recording and playback techniques, not notably with the compact disc. The transformation of audio from analog electrical signals into “ones and zeroes” came about in the 1980’s, when computer based Digital Audio Workstations (DAW’s) became affordable and started to compete with traditional magnetic tape recording. Instead of limiting him/herself to what a 24 track tape machine and analog processing equipment could do, recording engineers could now harness computers to increase track counts, create new sounds previously never heard, and alter sounds in new ways. DAW recording didn’t become the industry standard until we entered the 21st century, but its introduction in the 80’s paved the way for new styles of music, and more importantly encouraged the introduction of the digital music formats and standards we use today.

The logo for the Compact Disc format.

In 1982 Philips and Sony introduced the Compact Disc, a new way to store digital information, including digital audio. Over the next 20 years CD’s became an increasingly popular way to purchase and listen to music, and by the early 2000’s they had completely eclipsed cassette tapes as the standard for portable music in handheld devices and in cars. CD’s were originally developed for music storage and playback, but they were quickly modified to store any kind of digital data.

The Internet Takes Over

In the 15 years leading up to 1990 the US government had been experimenting with creating networks by manually connecting computers over long distances. These ideas came to fruition when the World Wide Web was created in 1989 by Tim Berners-Lee. By the mid 90’s many people had internet access, and by the late 90’s a lot of them were sharing music online. The mp3 file format was also introduced in the mid 90’s. Mp3’s are what allowed online music sharing and selling to take off, because they are smaller “compressed” versions of larger audio files. There are parts of the audible spectrum included in full size uncompressed file formats that are not crucial to human’s general perception of a sound. The digital data representing some of those non essential frequencies can be removed, and to an untrained ear the mp3 will sound identical to the original. Therefore, mp3’s are the result of a computer algorithm removing the parts of a sound that won’t impact the listener’s perception of it, and then piecing the remaining data back together. The result is a file that is pretty much sonically identical but up to 10 times smaller.

In the beginning internet music sharing was rampant with piracy, and websites like Napster (which operated briefly in its free form from June 1999-July 2001) that facilitated such illegal activity were shut down quickly. The problem was that there were no standards for copyright protection of music on the internet, so the very early days of peer t0 peer music sharing on the internet weren’t technically illegal. Regulatory agencies quickly set up standards and laws regarding music on the internet, and soon Apple jumped into the mix with iTunes, the iTunes store, and the iPod.

The original iPod, released in 2001.

From 2001-2003 Apple put out a series of groundbreaking new products: the iPod, iTunes, and the iTunes Store. The iPod was Apple’s ultraportable introductory product to the hard disk music player market. In the years leading up to the iPod’s release, other companies such as Sony had released music players that acted as tiny PC’s, where you could store the music from your CD’s and play it back.  The iPod was the first of these types of devices that took off, and it was much smaller and held 1000 songs, a great deal more than its competitors. iTunes and the iTunes store were the first widely accepted platform with which users could organize the music that they had on CD’s, and search for and buy new songs online. Apple created its own copyright protection standard, which allows up to 5 iTunes enabled devices to share the same songs, but prevents songs purchased on iTunes from being played on any unauthorized platform. Moving forward through the 2000’s  some other companies like Amazon and Rhapsody started selling music online without copyright protection, but Apple products have maintained their position as the major player in that market. It is important to note the introduction of Pandora internet radio in 2005, because it was the first major web based music streaming service. Pandora was not immensely popular for another 4 years, but its introduction primed users for the streaming services to come, and introduced the idea of paying a monthly fee to

By the mid 2000’s the average user’s music experience was entirely in the digital domain, and increasingly portable. Most music consumers were buying CD’s and/or purchasing mp3’s online using iTunes and other online music stores. Laptop and desktop computers were central to an avid music fan’s setup, because this is where a lot of CD’s were copied to and added to the library of songs purchased online. Portable hard disk (and later flash based) music players were quite popular, and every year they packed more and more songs and additional features into smaller and smaller footprints. Portable media players such as the iPod were commonplace, and touchscreen smartphones were starting to enter the playing field. At this time 500 million people were using iTunes and a significant portion of them were playing the songs they bought on Apple devices. For users who didn’t have Apple devices to play Apple secured songs, Amazon and Rhapsody offered a comparable selection that could be downloaded and played on a multitude of 3rd party players.

At this point, even though the music industry was moving away from material goods and towards downloads, most people were still paying to own a copy of a song or album. Whether you used iTunes or bought CD’s, most people were still paying a flat one time rate to purchase music. This was the general practice since gramophone records became available to the public in the 20’s, and it persisted as the only way to consume music until the mid 2000’s. But what if instead of paying to own each individual song, you could pay a monthly fee to have online streaming access to (virtually) every song you could have purchased before? Spotify introduced this concept in 2008, and changed the music industry in way that it hadn’t changed ever before.



Seel, P. (2012). Digital universe : The global telecommunication revolution. Malden, MA: Wiley-Blackwell.

Grant, A., & Meadows, J. (2012). Communication Technology Update and Fundamentals(13th ed.). Hoboken: Taylor and Francis.