Managing Innovation Presentation: Spotify
- 1. TEAM 10 Advaita Nigudkar Eric Lo Estherlita Saerang Jiyang Zhao Jijo Banerjee
- 2. Peer-to-peer music sharing service Before Spotify First streaming on- demand music subscription service (low streaming quality) Individual purchase of song or album People either legally or illegally gain access to music through the internet
- 3. InnovationWhy Spotify is innovative and gain great success • High streaming quality (320kbps) • Free streaming option • Great user interface • Personally curated and current playlists OFFER AWESOME SERVICES Spotify extensive music collection expands ways that music lovers interact with music around the world ACCESS • Stir people away from piracy and less monetized platforms • Generate additional royalties for each streaming • Platform for new and/or smaller artists • Use data analytics to provide record companies with credible streaming data and trends BENEFIT THE MUSIC BUSINESS 01 03 02
- 4. First Ideation In 2006, Daniel Ek, Martin Lorentzon and a small group of people were chatting by the HTPC machine They realized that it was cumbersome to get content online despite having a capable supporting technology This group of friends decided to pool their ideas and diverse skill-sets to create a start-up company, Spotify AB Launched in October 2008
- 6. v February 2010 Received a small investment from Founders Fund to kick start its commercialization 2011 Secured $100 M at $1 billion valuation to support US launch 2012 Goldman-Sachs raised $100 M at $3 billion valuation to support RnD and marketing outreach March 2016 Raised $1 billion in debt financing January 2016 Raised $500 M through convertible bonds Funding History
- 7. www.companyname.com © 2016 Motagua PowerPoint Multipurpose Theme. All Rights Reserved. ChallengesChallenges Spotify faced throughout the years and how they handled them ActionChallenge Result Agile framework Organization size and how to assimilate the organization into a single cohesive unit Spotify implemented cross functionality 70% of the royalties are paid to label companies and the artist low net income for the company itself Debt financing More money inflow to make the organization grow despite the risk associated
- 8. www.companyname.com © 2016 Motagua PowerPoint Multipurpose Theme. All Rights Reserved. 8 SWOT Analysis S Strengths • Agile organization allows quick solutions to problems • Leverage crowdsourcing and user driven content to grow site material • Quality streaming and presence of free service allows high traffic Weaknesses • Low net income resulting in a loss making company • Labels and artists are freezing out Spotify due to unfair compensation Opportunities • New features such as jogging features, podcasts • Appeal to more users for every occasion • Consider JV or alliances with other brands (e.g. Nike + jogging tracker) Threats • Apple music, Tidal • Amazon prime music • YouTube Red • Better business model W O T
- 9. • Medisys case • Greeley case Related Articles Class Concept • Cross functionality in the organization Company Action Company Actions and ConceptsComparison between Spotify case study and what we’ve learned in class • How to implement cross functionality right • Cycle of Technological Change • Different stages of technological change • Spotify incorporated concepts of technological cycle into its organization • Disruptive Technology • Introduced high quality online streaming replacing peer to peer sharing (illegal streaming) reduce piracy • How disruptive technologies make older technologies obsolete
- 10. THANK YOU