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What is Spotify ?
Spotify is an audio streaming service which enables users to listen to music, podcasts etc. It also allows artists to showcase their content on Spotify.
Mission of Spotify is to unlock creativity and enable artists to show case their content via the medium.
Clarifying Questions
1) What do you want to grow? User Base, Content, Paying Subscribers, Revenue ?
Interviewer : Increase Revenue
2) How does Spotify earn revenue ?
Interviewer : Spotify earns revenue via advertisements and paying subscribers.
3) Does Spotify earn via Artists?
Interviewer : Nope Spotify actually pays royalty for each time a song from artist is played.
4) Are we focusing on any specific market?
Interviewer : developed markets say UK, US and Europe
5) Does Spotify show live content?
Interviewer : Spotify Live is a new social audio app from Spotify that lets you host and participate in live discussions.
Lets do a quick SWOT analysis to figure out what we can do.
Strengths
Huge User Base
Powerful Streaming Platform
Ability to showcase Live Content
Advertisers can advertise using Spotify
Spotify Live Platform
Weaknesses
Brand associated with music and it will take some effort to make people aware if we introduce new content
No other weaknesses
Lets took at threats before we look at opportunities
Threats
Several major players such as Apple, Google, Amazon have added music streaming services and looking to get a share of this lucrative market.
Amazon Prime has millions of subscribers and thus people can get streaming service for free.
Apple has been improving Apple Music constantly and looking to introduce different type of content on the platform.
Netflix can easily move into music/podcast streaming space and hence Spotify needs to diversify itself.
Opportunities
| Idea | pros | cons | Score |
| Spotify TV - add video content - movies, shows, documentaries | - engaging content, users will spend more time and pay extra for video content - Video Ads - Have necessary tech to support this. | Several Players have already established their place in the market ; tough to compete with them | 3/5 |
| Spotify Games | - Large user-base who can play games during commute or during free time along with lstening to songs -Monetize these games thus pulling extra revenue from users and game studios | - No expertise in this domain | 2/5 |
| Spotify Live Sports Commentary along with scorecards and results | - Already existing spotify Live platform - Attracting a new set of users passionate about sports - Monetize this by providing access to specific streams such as F1, Soccer, Premier League, La Liga etc. | - Need to partner with Radio Channels and Sports broadcasters | 4/5 |
| Paid Playlists | - Very little effort in terms of development and marketing. | - Users wouldnt want to pay for something which can be free of charge. | 1/5 |
Based on the score, I would go for launching Live Sports on Spotify, we can leverage the existing Spotify Live platform to use it to broadcast live commentary for Sports along with results and live scores.
We can monetize these streams to have packages for different sports or leagues as mentioned above.
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Clarifying questions
What growth are we talking about? Is it user growth or revenue growth coz these are two different things. User growth may not necessarily translate into revenue growth and vice versa–> we are talking about user growth
Should we look at something internally -> conversion funnel and find an opportunity there
Should we look at it more strategically in terms of product offering ->look at strategic product offering
Are we looking at any specific geography → EU, US, India
Can we look a tapping new geographies as well
Should we look at acquisition option as well
Company and the product
Spotify started with an offering to listen to musics. Customer have an option to listen to music from different genre languages. They can create own library or multiple library for different occasions.
It also has some original music which is sung by the singers as exclusive content.
Recently it has expanded into podcast offering. Users can listen to podcast which are live or prerecorded
In terms of packaging→ it offers free content which is ad driven →
Premium ad free content → prefer convenience and experience.
Lets quickly try to break down different customer segment of spotify
Power users → premium members , listens to songs. Multiple library based on occasion. Prefers convenience over money
Value users → regularly listens to songs on spotify while doing exercise, travel but don't want to pay for this. If charged they would migrate to other platform
Casual users→ occasionally listens to song on spotify. When exercising, travel
Podcast users→ they listed to podcast on regular basis for learning or entertainment purpose
Strategic choices
In order to grow spotify by 20% , we should look at multiple avenues or strategic choices
podcast for kids→ untapped category. Kids like to listen to stories. Spotify can look a partnering with disney and work on audio content for kids
Elderly → likes to keep updated with latest news → look at partnering with news channels and deliver live news
Health and wellness podcast → lot of focus on health and wellness. It can target few segments initially->diabetic, bp and run podcast on diet. Motivation talk. Success stories. Community
Video contents→ segment of customers who engage with spotify only when they are travelling, walking, exercising. If they are free they listen to that on you tube or other platform. Spotify should also look at this as an opportunity.
It may need technological changes→ more space and bandwidth
Audio talks-> if you are aware of clubhouse, twitter spaces-> it has worked really well to connect brand with customers. Most of the time it is influencer based. Spotify can look at building community of singers/influencers and have daily sessions
Evaluate Strategic choices
Of all the option, option 5 seems most feasible. Spotify already have artist and customers on their platform. They just need to support with feature of artist and option for QnA
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Gold PM
Clarifying questions
What growth are we talking about? Is it user growth or revenue growth coz these are two different things. User growth may not necessarily translate into revenue growth and vice versa–> we are talking about user growth
Should we look at something internally -> conversion funnel and find an opportunity there
Should we look at it more strategically in terms of product offering ->look at strategic product offering
Are we looking at any specific geography → EU, US, India
Can we look a tapping new geographies as well
Should we look at acquisition option as well
Company and the product
Spotify started with an offering to listen to musics. Customer have an option to listen to music from different genre languages. They can create own library or multiple library for different occasions.
It also has some original music which is sung by the singers as exclusive content.
Recently it has expanded into podcast offering. Users can listen to podcast which are live or prerecorded
In terms of packaging→ it offers free content which is ad driven →
Premium ad free content → prefer convenience and experience.
Lets quickly try to break down different customer segment of spotify
Power users → premium members , listens to songs. Multiple library based on occasion. Prefers convenience over money
Value users → regularly listens to songs on spotify while doing exercise, travel but don't want to pay for this. If charged they would migrate to other platform
Casual users→ occasionally listens to song on spotify. When exercising, travel
Podcast users→ they listed to podcast on regular basis for learning or entertainment purpose
Strategic choices
In order to grow spotify by 20% , we should look at multiple avenues or strategic choices
podcast for kids→ untapped category. Kids like to listen to stories. Spotify can look a partnering with disney and work on audio content for kids
Elderly → likes to keep updated with latest news → look at partnering with news channels and deliver live news
Health and wellness podcast → lot of focus on health and wellness. It can target few segments initially->diabetic, bp and run podcast on diet. Motivation talk. Success stories. Community
Video contents→ segment of customers who engage with spotify only when they are travelling, walking, exercising. If they are free they listen to that on you tube or other platform. Spotify should also look at this as an opportunity.
It may need technological changes→ more space and bandwidth
Audio talks-> if you are aware of clubhouse, twitter spaces-> it has worked really well to connect brand with customers. Most of the time it is influencer based. Spotify can look at building community of singers/influencers and have daily sessions
Evaluate Strategic choices
Of all the option, option 5 seems most feasible. Spotify already have artist and customers on their platform. They just need to support with feature of artist and option for QnA
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- mission of spotify : “to unlock the potential of human creativity”
- Use cases
- Audio - audiobooks (competitor audible)
- Audio - audiobooks for children + physical books (small companies)
- entertainment → movies & start entering video space (netflix, amazon prime & hotstar as top competitors)
- entertainment → travel experiences (airbnb as competitor)
- enter into the teaching space of music (small companies)
- musicians → k pop → musicians merch selling platform (no famous competitor)
- enter into other creativity fields → selling & displaying art (not lucrative, pinterest as competitor)
- entertainment → selling art experiences (not lucrative, no major competitor)
- physical devices to play music (like apple)
- physical devices to listen music (like ipod)
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New market | audiobooks for children + physical books (small companies)
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| - travel experiences (airbnb as competitor) - musicians merch selling platform - selling & displaying art - selling art experiences - VR music concerts |
Extended market | audiobooks + recommendations (competitor audible)
| - audiobooks + note space (like Evernote/making clips of audio) | - music online interactive concerts (sell + experience)
| - movies & start entering the video space (netflix, amazon prime & Hotstar as top competitors) - enter into the teaching space of music (small companies) - physical devices to play music - physical devices to listen to music - physical music concerts (sell + experience) |
Same market | - expand in new markets | - new content creation like netflix |
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| Existing platform | Core technology | Current skills | New skills |
- Audiobooks is a small market as most users prefer to read unless the creation of content is very unique and has drastic difference, it would not sustain growth required
- Music concerts as entertainment space is big enough for spotify as they already know kind of content that customers like. It’s comparatively new space on running concerts. To stand out spotify can make it as interactive as possible
- Physical devices of making tools to listen/play to music already has many competitors and hence wouldn’t suggest spotify to enter there. Like how amazon echo is connected/nudges growth of amazon prime, google has similar parallel with YT music. I wouldn’t suggest spotify even collaborate with them
Recommendation:
- Spotify could also go ahead and create new content like Netflix in the short term. It would strengthen spotify’s place in music
- Would suggest Spotify enter the concert space in the medium-term and expand to include VR technology to give great experiences.
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Get access to 2,346 pm interview questions and answers to give yourself a strong edge against other candidates that are interviewing for the same position
Get access to over 238 hours of video material containing an interview prep course, recorded mock interviews by expert PMs, group practice sessions, and QAs with expert PMs
Boost your confidence in PM interviews by attending peer to peer mock interview practices, group practices, and QA sessions with expert PMs
Get unlimited access for $12/month
Get access to 2,346 pm interview questions and answers to give yourself a strong edge against other candidates that are interviewing for the same position
Get access to over 238 hours of video material containing an interview prep course, recorded mock interviews by expert PMs, group practice sessions, and QAs with expert PMs
Boost your confidence in PM interviews by attending peer to peer mock interview practices, group practices, and QA sessions with expert PMs
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