EVOLVING MUSIC STREAMING: SPOTIFY CASE STUDY
Spotify faces stiff competition from global rivals such as YouTube Music, Apple Music, Amazon Music, and even Tencent Music. It's brand and cultural appeal to Gen Z is being challenged by TikTok. I analyze Spotify's current position as an audio streaming company, and how it can evolve to consolidate its dominance in the music streaming space.
OVERVIEW
Spotify is still the dominant force in global music streaming services. However, it’s market share has dropped to 30.5% in 2022 from 34% in 2019.
Recently, Spotify released a series of new music features aimed at user retention and engagement, and are now trying to have music videos on their platform. Just this year, the company released Clips, an AI DJ, and Time Capsule. In 2022, they acquired Heardle, but shut it down in May 2023. Blend and Enhance were released quite recently, and Wrapped keeps improving, but Spotify still searches for ways to keep users engaged. In this case study, I explore how Spotify can build engagement through music discovery.
WHY BARELY ANY SOCIAL FEATURES?
Spotify does have some social features like Blend and Collaborative playlists, but few sharing and in-app communication features. I can think of a few reasons for this:
-
Focus on personalization to enhance the listening experience
-
Emphasis on growth and expansion into new markets and spaces
-
Building social graphs may take significant resources and infrastructure
-
Last but not least, features like in-app chat may not align with Spotify's mission
SPOTIFY MISSION
Unlock the potential of human creativity—by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it.
MARKET LANDSCAPE - WHY MUSIC DISCOVERY?
As mentioned, Spotify’s market share continues to drop every year. They are no longer competing against just music streaming platforms. All their major global competitors - YouTube Music, Apple Music, and Amazon Music, and even Tencent music (though Spotify has a JV with them) have their own ecosystem. I have conducted a SWOT analysis to better understand the market landscape, but here is a few key takeaways regarding why this is important:
-
Spotify is solely an audio streaming company at the moment and has less to leverage than competitors
-
Spotify needs to keep users engaged and on the app, and music discovery could play an important role in that
-
Spotify needs to monetize its services: background audio streaming and podcasts are hard to monetize
-
Spotify’s appeal has been its brand and cultural appeal to Gen Z and historical affinity to users, with Wrapped being one of the most anticipated features every year
-
TikTok is eating into Spotify’s position culturally. People can also find music through TikTok, and watch podcast snippets through the platform - they could expand into these avenues
DEVELOPMENT PROCESS
Many years ago, I watched a webinar by Spotify PM Miles Lennon on how Spotify develops products that I would use in such a case and that has stuck with me since:
USER STUDIES
The goal of my user studies was to determine if music discovery was even a problem to be solved. I also wanted to see how the current discovery methods helped users discover music and use it in my studies
Current Discovery Methods
-
Discover Weekly
-
Spotify curated playlists
-
User playlists
-
Radio
-
AI DJ
-
Spotify Clips
-
Friends Activity
-
Blend
-
Enhance
-
Other
I conducted user interviews and surveys in order to obtain both qualitative and quantitative data and gained some interesting insights. I also leveraged my expertise in data science to swiftly analyze the datasets in R, using visualizations and Natural Language Processing to break down transcribed user interview data and to validate any hypotheses. Below are the findings of my user studies
Word cloud of most popular music discovery platforms
Graphic showing most common reasons users like other platforms for music discovery
Sensitivity analysis showing high percentage of negativity towards Discovery Weekly ( values between -4 and 0 represent negative sentiment
SPOTIFY CUSTOMERS
I identified 4 main types of customers:
For the purpose of this study and given the user data is from listeners, we will focus our attention to users and define some user personas from the research
USER PERSONA AND JOURNEY
After sifting through the data, I defined some user personas and prioritized the one with the most traits characteristic of the findings.
Based off the persona and user journey, I ideated opportunities and solutions to think of features that would solve the problem at hand
FEATURE DESIGN
CORE FEATURE: AMPLIFY
Key features:
-
Listeners can boost or ‘Amplify’ songs they are listening to or in their Clips feed
-
Songs that are ‘Amplified’ by a listener's friends will show up on their Clips feed
-
This can refresh a few times a day if a listener's circle 'Amplifies' other songs often
-
Listeners can Amplify limited (10) songs a day to maintain integrity and trust of the feature
-
Listeners won’t know who ‘Amplified’ the songs
-
Promotes community engagement and connection to other users
NICE TO HAVE:
-
Artists can reward their fans that most Amplified them
BENEFITS
-
Community feel: This feature can make users feel integrated with the Spotify community
-
Engagement: Users can feel incentivized to interact with the app
-
Discovery: Users may have a more personalized experience with Discovery and trust the suggestions, which is the main goal here
-
Artist popularity: New artists can shown up more frequently in a user's suggestions if their friend Amplifies their songs, leading to better reach and happier artists
-
Artist-Listener Connection: Listeners can receive rewards such as pre-sale codes or merchandise for being top Amplifiers
DRAWBACKS
-
Cannibalization: This might Cannibalize other features such as AI DJ that Spotify are keen on pushing
-
Possible coordinated efforts: Artists may prompt fans or inner circle to 'Amplify' their songs and prop up their popularity, preventing organic promotion
-
User Experience Fragmentation: This may make the overall app experience overwhelming for some users and new users
-
Resources: Implementing such a feature may require significant technical resources to construct the algorithm or blend it in with current Clips algorithm
-
Inequitable Rewards: Potentially lead to unfairness or favoritism in the distribution of rewards, causing dissatisfaction among users
Key features:
-
Users can send an Amplified song as a 'Wristband' to friends (mutual followers)
-
A user can send one Wristband to one person everyday
-
Everyday, at a certain time, people will receive a notification to View their ‘Wristband’ (if they received one)
-
The ‘Wristband’ will expire after a certain amount of time
-
Receiver will not know who sent the ‘Wristband’
-
The feature will be opt-in for privacy
ADDITIONAL CONSIDERATION: WRISTBANDS
BENEFITS
-
Engagement: This feature could empower users to feel excited and engaged with the app
-
Music Discovery: Users can discover songs through friends reliably and send it to friends to view later
-
Social connection: Users can socialize within the app, and the mystery element can keep them intrigued
DRAWBACKS
-
Brand Identity: Users may prefer Spotify as a purely music-focused platform and may be resistant to or uninterested in social features.
-
Diversion from Core Functionality: Risk that it could shift the focus away from Spotify's core functionality of music streaming
-
Invasive feel: Users may not want to receive song suggestions from some friends and may not want to be peppered with notifications
-
Technical Challenges: Sending notifications to so many users and them listening at the same time may strain the system, and incur additional server costs
LAUNCH ROADMAP
Phase 0:
-
Assumption: In this study, it is assumed appropriate market research and user studies are conducted
-
This phase should include PI and Sprint planning, story grooming, stakeholder alignment, release planning, product specifications
RELEASE STRATEGY
