Spotify: Dominating Music In Real Time

UNDERSTAND TODAY. SHAPE TOMORROW.
LHBS // SPOTIFY: DOMINATING MUSIC IN THE DIGITAL AGE
the latest installment of our: Customer Value Series
SPOTIFY:
DOMINATING
MUSIC IN REAL
TIME

ABOUT.
INTRODUCTION
UNDERSTAND TODAY. SHAPE TOMORROW. 2
Discove Deﬁn Develo Delive
At LHBS, we believe that brand or business strategies need to be
prescriptive not just descriptive. A strategy needs to drive action
through meaningful Customer Value Propositions.
That’s why we work with our Customer Value Proposition
Canvas as a navigation system for bringing strategy to life.
We’ve created the Customer Value Series to analyze and share
how leading companies bring their Customer Value Propositions
to life through their core products, added value services, the
customer journey and communication.
This issue highlights Spotify - the on-demand music service.
We hope you enjoy this deck and are able to be inspired by it in
your innovation process.
INTRODUCTIONLHBS // SPOTIFY: DOMINATING MUSIC IN THE DIGITAL AGE

“We’re not in the music space-
we’re in the moment space” 
Daniel Ek 
CEO Spotify

INTRODU
CTION.
Spotify: the largest on-demand music service in the world, and
growing fast. They operate on a “freemium” model where users
can search music by artist, album, genre, playlist or record label.
With premium, users can avoid advertisements and download
the music. Tens of millions of daily Spotify users generates data
that gives Spotify a unique opportunity to develop their
products and services based on user behavior.
This report will provide some background on Spotify and
explore their Customer Value Proposition using our CVP
Canvas. We will identify the brand initiatives surrounding
product innovation, added-value services, shopping experience,
and communication that contributed to a new success.
LHBS THE UNCONVENTIONAL STRATEGY FIRM. We help
companies to understand emerging customer needs & expectations
and shape business models, brand strategies and customer
experiences to unlock future growth.
http://www.lhbs.com
Abhijeet Patil
Consultant at LHBS
lhbs.com | ap@lhbs.com
INTRODUCTION
4

CONTENT.
CUSTOMER VALUE
CANVAS
CONCLUSIONS &
IMPLICATIONS
ABOUT
SPOTIFY
CONTENT
5
Chapter 1 Chapter 2 Chapter 3

ABOUT
SPOTIFY
Chapter 1
Quick facts about the company and its growth

SPOTIFY USERS
7
Premium SubscribersActive users
140M 60M
Source: Spotify
Fast Company
LHBS // SPOTIFY: DOMINATING MUSIC IN THE DIGITAL AGE ABOUT SPOTIFY
Spotify has an impressive 25% conversion rate from “Freemium” account to
“Premium” account

148 MINUTES
Average time daily users spend listening to Spotify
UNDERSTAND TODAY. SHAPE TOMORROW. 8Source: Spotify For Brands

SPOTIFY DOMINATES ON-
DEMAND MUSIC AMONGST
PAID USERS
9
0
15
30
45
60
Spotify Apple Music Deezer Pandora Rhapsody
3,54,3
6,9
27
60
(data in millions)
Source: Statista

REPORT TITLE // IMPLICATIONS.
APART FROM
LISTENING TO
MUSIC, SPOTIFY
IS ALSO
EXPANDING ITS
OFFERINGS:
10
Learning musical
instruments
Learning languages
Listening to short
stories and poetry
Source: The Odyssey Online

MISSION.
“Give people access to all the music
they want all the time - in a
completely legal and accessible
way.”
11Source: Spotify

SPOTIFY’S
CULTURE OF
INNOVATION
CONTRIBUTING
TO SUCCESS
12Source: Corporate-Rebels
• Active and collective sharing of the
mission
• Harness the power of technology
• Hire for culture, train for skills
• A ﬂock of start-ups
• Fail faster than anyone else

UNDERSTAND TODAY. SHAPE TOMORROW. 13Source: Crunchbase
This year, Spotify have
already acquired four
new tech ﬁrms.
These will enable
them to expand
and enhance CX.
Niland
AI search & recommendation
software for music
Mediachain Labs
Blockchain start-up
MightyTV
Video streaming app customized
to personal preferences
Sonalytic
Audio detection start-up for
identiﬁcation, monitoring &
discovery

DJ Tiesto, talking about Spotify’s Running
feature:
“This is where
music is heading.
Now the customer
creates the mood,
rather than the
artist” 
Source: Billboard
Source: Billboard

How is Spotify operating in the four areas of
products, services, experience and communication
to best meet emerging customer expectations and
to fulﬁll their customer value proposition?
CUSTOMER VALUE CANVAS
15

CUSTOMER VALUE
CANVAS
Chapter 2
Spotify initiatives

The better a company manages the interrelation
between their products, services,
experience and communication,
the more value it will create for its customers
and in turn, generate value from its customers.
CUSTOMER VALUE CANVAS
17

Customer Value Canvas®
CORE PRODUCT
How might your Customer Value Proposition inspire or impact the
performance or quality of your core product?
ADDED-VALUE SERVICES
How might your Customer Value Proposition inspire or inﬂuence
additional services to simplify or enhance that create added value
around the consumption or usage of your product?
COMMUNICATION & TOUCH POINTS
How might you create communication that  
delivers your Customer Value Proposition and  
not just promises it?
END-2-END EXPERIENCE
How might your Customer Value Proposition
inspire a smoother, more pleasant customer
experience in your omnichannel touch points.
CUSTOMER
VALUE PROPOSITION
A clear, concise and compelling
articulation of how the needs that are
important to the customer are satisﬁed by
the company / business unit.
Designed for: Designed by: Date: Version:
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
How does Spotify facilitate and
deliver services that enrich and
simplify the lives of their customers
around their core product?
Which products does Spotify create?
How does Spotify solve real customer
problems with their product design?
How is Spotify growing their core
capabilities of being a market place?
How does Spotify make searching for,
purchase and interacting with their
products & services a uniquely
positive experience?
What kind of content does Spotify
create that leads people to enjoy
consumption and sharing, rather
than wanting to escape the
advertisements?
LHBS // DOMINO’S STRATEGY: FROM PIZZA TO TECH GIANT CUSTOMER VALUE CANVAS

LHBS Put the Title of the Report here
HOW TO.
SPOTIFY’S
CUSTOMER
VALUE
PROPOSITION.
Customer Value Proposition
Access to a world of music,
individualized to enrich
every moment.
CUSTOMER VALUE CANVASLHBS // SPOTIFY: DOMINATING MUSIC IN THE DIGITAL AGE

CORE PRODUCT
WHAT IS THE CORE BUSINESS OF SPOTIFY, AND HOW IT IS
EVOLVING?

UNDERSTAND TODAY. SHAPE TOMORROW.Source:
Huge Music Library
At the heart of Spotify and generating the most
value for users is their huge library of music and
audio ﬁles.
Explore sign
Spotify offers those subscribed to the service access
to millions of music tracks as well as other audio
content.
The Spotify team also create many playlists, curated
for speciﬁc genres, decades, moods and even based
on what the user has been listening to recently.
21

Curated Playlists
Spotify’s core product is evolving as they become
more known as content curated.
Explore sign
The Spotify team also create many playlists, curated
for speciﬁc genres, decades, moods and even based
on what the user has been listening to recently.
22

“We now have more technology than ever before to
ensure that if you’re the smallest, strangest musician in
the world, doing something that only 20 people in the
world will dig, we can now ﬁnd those 20 people and
connect the dots between the artist and listeners.”
- Matthew Ogle on Discover Weekly feature
(Ex-Product Director Spotify)
23

HOW DOES SPOTIFY FACILITATE AND DELIVER SERVICES THAT
ENRICH AND SIMPLIFY THE LIVES OF THEIR CUSTOMERS
AROUND THEIR CORE PRODUCTS?
LHBS // SPOTIFY: DOMINATING MUSIC IN THE DIGITAL AGE CUSTOMER VALUE CANVAS

Discover Weekly
The streaming service's Discover Weekly brings
users two hours of custom-made music
recommendations each Monday morning.
Explore sign
The playlists have been personalized to users based
on their previous week; their weekly delivery is
intended to make users feel like their best friends
made them a personalized mixtape every single
week. As user's taste evolves, Discover Weekly will
keep up.
More recently they released the Time Capsule
feature, a personal playlist for every user guessing
their teen-years favorites.
25
LHBS // SPOTIFY: DOMINATING MUSIC IN THE DIGITAL AGE SHOPPING EXPERIENCE

Spotify & Waze
Partner For Seamless
Navigation
The new partnership means users can access
their music without exiting the app and visa
versa.
Explore sign
Working towards seamless connectivity, Spotify and
Waze have partnered to allow users to continue to
listen to their playlists while navigating within the
app, and Spotify listeners can access the Waze’s
navigation feature while in the Spotify app.
26
ADDED VALUE SERVICESLHBS // SPOTIFY: DOMINATING MUSIC IN THE DIGITAL AGE

Spotify Launches App
For Artists
The real-time streaming data collecting app will
let artists know how their music is being
explored.
Explore sign
The app is a one-stop shop for artists to track their
new music as it goes live, control their presence on
Spotify, and get to know how the music is being
adopted by the listeners.
Artists can use these pieces of information to better
understand their listeners, how they listen, their
gender, age breakdowns, where they’re listening
from.
27
ADDED VALUE SERVICESLHBS // SPOTIFY: DOMINATING MUSIC IN THE DIGITAL AGE

Spotify For Gamers
Spotify will be available on the Microsoft’s Xbox
One in around 34 markets globally.
Explore sign
The Spotify integration will allow gamers to choose
the perfect music from Spotify while playing games
on their Xbox console.
The service offers users’ to personalize the
experience of gaming. They can simply play music on
demand, regardless of whether they have free or
premium account.
28

Spotify And Hulu
Teams Up For Students
The platforms have teamed up to bring $4.99
subscription bundle to students.
Explore sign
The eligible students studying in the U.S. can
beneﬁt “Spotify Premium for Students” along with
Hulu. For the students with a premium subscription,
already priced at $4.99 a month can activate the
Hulu plan
29

Spotify Is Offering
Personalized List Of
Concerts
The on-demand music service wants to help users
discover artists and their live concerts happening
around their location.
Explore sign
The feature Concerts, will generate and suggest a
personalized list of concerts happening in users' area
that Spotify thinks they’ll enjoy. The feature is
available in the Browse tab, where users can see
some live concerts that they can tune into around
their locations.
The user can also straight away purchase the tickets
to the concert, for which Spotify has partnered with
SongKick.
30

Spotify and Tinder: It’s
a Match!
Users of the dating app Tinder can now also
choose potential matches based on their taste in
music.
Explore sign
A cooperation with streaming service Spotify lets
users listen to the favorite song of other people on
their proﬁles. It works with and without a Spotify
account.
Users can include their personal anthem on their
Tinder proﬁle. When connected with a Spotify
account, users can also show which other artists they
listen to.
31
END-TO-END EXPERIENCELHBS // SPOTIFY: DOMINATING MUSIC IN THE DIGITAL AGE

END-2-END
EXPERIENCE
HOW DOES SPOTIFY DELIVER A SUPERIOR CUSTOMER
EXPERIENCE FROM SEARCH TO USE TO CUSTOMER SERVICE?

Spotify With Scan The
QR Feature
Spotify is launching the new feature "Spotify
Codes", for instant streaming and sharing the
music with friends nearby.
Explore sign
Spotify Codes creates a unique barcode which can be
scanned with the new camera in Spotify's app search
button, located at top right corner.
The feature makes the process of sharing
information about songs hassle-free.
33

Spotify On Google
Assistant
Spotify users can now simply say “Ok Google,
Play Spotify” and interact with the Spotify
service entirely hands free.
Explore sign
Google announced that Spotify voice commands will
be fully supported on Google Assistant. The service
will be available to both free and premium Spotify
users.
The feature will be supported across all the Android
phones, Google Home products globally. For
frictionless experience, users just need to link their
Spotify and make it the default player on Google
Assistant.
34

Easy Listening Across
Interfaces
Whether users want to listen online, ofﬂine, via a
mobile device or when driving, Spotify enables a
frictionless experience across interfaces.
Explore sign
Whether using the Spotify app, Spotify web player or
installing the program on your computer, users can
access their account and listen to music anywhere.
Anywhere could mean on a mobile device, on games
consoles, in the car, on TV or on speakers.
35

Cancel Anytime
When subscribed to Spotify Premium, users are
able to cancel their account simply and at any
time.
Explore sign
Spotify users are not tied into a contract when they
purchase Premium, and there is a simple tutorial on
how to cancel their account which they can do at any
time, along with the words: “No hard feelings :)”
They also ask the reason why the person is choosing
to cancel their account, and the options such as “I am
moving abroad” means they can suggest an
alternative solution for this if users are not aware of
their global services.
36

Spotify Assistant On
Facebook Messenger
The AI assistant called “M” will now start
suggesting songs that people should listen on
Spotify.
Explore sign
The intelligent assistant M delivers Spotify
suggestions when music is brought up in
conversation.
People can also search and share music within the
bot. It starts giving suggestions once the user
mentions relative phrases like “Play Music” or “Listen
to Music”. If users want to listen to songs from
speciﬁc artists, they can do so with the M.
37

Spotify Creates
Playlists Based on
Weather & Location
Data
Partnering with Accuweather, Spotify created a
new playlist website: Climatune.
Explore sign
A new playlist generator created by Spotify takes into
account the weather of the location you are in.
Climatune is the result of a year of research that
compared the songs played on Spotify with the
weather of the location the listener is in. It showed:
the weather changes which music people listen to.
38

Family Feature
Spotify offer a family option so everyone can
enjoy their own Spotify account under one roof.
Explore sign
Spotify advertise their family option as allowing
people to “Listen together, but also separately.” One
person in the household is designated as the one who
pays for the account, and everyone still has their
own, individual accounts with personal playlists.
The cost is much less than if each person was to
purchase a Premium account, making it a very cost-
effective option for families.
39

TOUCH-POINTS &
COMMUNICATION
What kind of content does Spotify create that leads people to enjoy
consumption and sharing, rather than wanting to escape the
advertisements?

"Thanks 2016, it's been
weird"
Spotify has playfully used their listener data to
kick off their largest-ever global, outdoor
campaign.
Explore sign
The whole idea is about aggregating data and turning
them into playful headlines such as:
- “Dear person who played 'Sorry' 42 times on
Valentine's Day, what did you do?"
- “Dear person in the Theater District who listened to
the Hamilton Soundtrack 5,376 times this year, can
you get us tickets?"
- “Dear 3,749 people who streamed 'It's the End of
the World as We Know It' the day of the Brexit vote,
hang in there."
41
TOUCH-POINTS & COMMUNICATIONLHBS // SPOTIFY: DOMINATING MUSIC IN THE DIGITAL AGE

Spotify is Looking for
Presidential
Candidates
In a job advert, Spotify is recruiting a “President
of Playlists” experienced in running a highly-
regarded nation and holding a Nobel Peace Prize
- descriptions ﬁtting well to Obama.
Explore sign
Spotify recently released a new job advert on their
career section. The music streaming giant wants to
hire a President of Playlists that has successfully
created an eclectic summer playlist, has good
relationships with artists and musicians like Kendrick
Lamar, and that holds a Nobel Peace Prize.
42

Spotify Launches
Cartoon Series About
Music History
The music streaming service is attempting to gain
traction with a new video series that provides
users with a history lesson about their musical
choices.
Explore sign
Spotify's latest video series, Deconstructing, is meant
to teach listeners about the history of their favorite
genres.
The video series is designed to be informative and
fun for users, and looks to engage them on a higher
level beyond curated playlists.
43

Spotify Salutes Goofy
Playlist Names
Music streaming service Spotify continues to use
user data in its out of home campaign.
Explore sign
Spotify’s global billboard campaign based on listener
data that highlighted bizarre user habits is now being
continued. A follow-up campaign creates headlines
from unusually named playlists in some U.S. cities.
44

Secret Social Event By
Spotify
The most secretive and exclusive event of the
year by Spotify has been announced.
Explore sign
To get the tickets of the event students will have to
comment on the campaign video of Spotify posted on
Facebook, Twitter and Instagram with the hashtag
followed by their university name.
The where and how's of the event has been kept
secretive, but once student wins the prize he/she will
be awarded two standard tickets for the Secret
Social event and a one night's accommodation at a
hotel conﬁrmed by Spotify. On the event date,
students will be provided with the transportation
facility from speciﬁc pickup points around the city.
45

Spotify Is Hosting Hip-
Hop Tour
The music streaming platform is hosting a hip-
hop concert tour in partnership with Live Nation
across North America.
Explore sign
The series is titled “RapCaviar Live” and it will kick-off
in the Atlanta featuring Trap God, Guzzi Mane along
with some other artists. After Atlanta, the concert
will be hosted at Chicago, Houston, Los Angeles,
New York and Toronto.
46

SPOTIFY’S CVP
SUMMARY

Customer Value Canvas®
CORE PRODUCT
How might your Customer Value Proposition inspire or impact the
performance or quality of your core product?
How might your Customer Value Proposition inspire or inﬂuence
additional services to simplify or enhance that create added value
around the consumption or usage of your product?
COMMUNICATION & TOUCH POINTS
How might you create communication that  
delivers your Customer Value Proposition and  
not just promises it?
END-2-END EXPERIENCE
How might your Customer Value Proposition
inspire a smoother, more pleasant customer
experience in your omnichannel touch points.
CUSTOMER
VALUE PROPOSITION
To enable people to listen to whatever
music they want, whenever they want,
wherever they want.
Designed for: Designed by: Date: Version:
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
LHBS // DOMINO’S STRATEGY: FROM PIZZA TO TECH GIANT CUSTOMER VALUE CANVAS
Huge Music Library
Curated Playlist
Spotify For Seamless Navigation
Spotify For Artists
Spotify And Tinder
Concert Locator
Spotify And Hulu Partnership
Discover Weekly
Spotify For Gamers
Spotify Assistant On FB Messenger
Spotify Codes
Easy Listening Across Interfaces
Family Feature
Cancel Anytime
Spotify On Google Assistant
Spotify Playlist Based On Climate
Thanks 2016 - Outdoor Campaign
Spotify Looking For Presidential
Candidate
Spotify Cartoon Series
Spotify Social Event
Spotify HipHop Tour

CONCLUSIONS &
IMPLICATIONS
What can we learn from Spotify?
Chapter 3
CONCLUSIONS & IMPLICATIONSLHBS // SPOTIFY: DOMINATING MUSIC IN THE DIGITAL AGE

ONE
Create a networking effect to connect customers and make
them stick
Spotify allows you to easily follow friends, enables simple sharing of songs, makes it possible to
collaborate on playlists and provides passive broadcasting to Facebook as people listen to songs.
The ease of using Spotify across different platforms and devices, further enables people to connect
wherever they are.
Once Spotify launched these features with Spotify connections, it dramatically boosted Spotify’s
value to each user with every new connection they made.

TWO
Harnessing Big Data, Machine Learning & Artiﬁcial Intelligence
can personalize & streamline experiences
Spotify has tens of millions of users logging on everyday for considerable amounts of time,
providing Spotify with tons of data. This data is used to create custom recommendations
like Discover Weekly.
As the service acquires more and more data, it’s training the algorithms to extrapolate
insights that impact the business and the experience of listeners.

THREE
If you’re collecting big data, share the goods
Partly a communication stunt, partly giving back. Spotify’s campaigns which shared user
data in amusing ads provided an element of value to the ones who supplied the data in the
ﬁrst place.
Not being coy and keeping data secret to purely beneﬁt themselves was a clever,
transparent way of showing they’re interested in their users and using the data to not only
personalize service but to give them a laugh with funny trivia regarding fellow users.

FOUR
Convert customers by increasing perceived value
Spotify’s impressive conversion rate (25%) is a result of greater perceived value, which is
offered in the form of escaping advertisements+features and functionalities including
ofﬂine listening and accessing accounts across borders.

Discover
ABOUT
LHBS. Define Develop Deliver
We are an unconventional strategy firm that helps clients to
better understand today and successfully shape tomorrow. LHBS
has extensive experience & expertise in business development,
brand building and customer experience. The firm works across all
major industries for clients from the FT Global 500, German
Mittelstand and fast growing startups.
ABOUT
We work with legacy organisations to adapt their customer value
proposition to meet emerging customer expectations. Together with our
clients we discover business opportunities and deliver integrated customer
offers for products, services, experiences and communication.
LHBS // DOMINO’S STRATEGY: FROM PIZZA TO TECH GIANT

LHBS Put the Title of the Report here
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Spotify: Dominating Music In Real Time

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