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    Spotify Resource Based View

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    Prity Kumari
    Spotify has attained a competitive advantage in the music streaming market through its resources and capabilities, such as its large music catalog of over 50 million songs and its relationships with music labels. A key capability is Spotify's personalized playlist generation system, which analyzes the music tastes of its 240 million users to automatically generate tailored playlists like "Discover Weekly." This user data and curation system is difficult for competitors to imitate. Spotify also leverages its large user base of 240 million subscribers through its "freemium" service model, which provides a free, high-quality experience to gain user data and engagement.

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    Spotify Resource Based View

    Uploaded by

    Prity Kumari
    742 views1 page
    Spotify has attained a competitive advantage in the music streaming market through its resources and capabilities, such as its large music catalog of over 50 million songs and its relationships with music labels. A key capability is Spotify's personalized playlist generation system, which analyzes the music tastes of its 240 million users to automatically generate tailored playlists like "Discover Weekly." This user data and curation system is difficult for competitors to imitate. Spotify also leverages its large user base of 240 million subscribers through its "freemium" service model, which provides a free, high-quality experience to gain user data and engagement.

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    Resource Based View of Spotify and Picoli's and Ive's Framework

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    Spotify has attained a competitive advantage in the music streaming market through its resources and capabilities, such as its large music catalog of over 50 million songs and its relationships with music labels. A key capability is Spotify's personalized playlist generation system, which analyzes the music tastes of its 240 million users to automatically generate tailored playlists like "Discover Weekly." This user data and curation system is difficult for competitors to imitate. Spotify also leverages its large user base of 240 million subscribers through its "freemium" service model, which provides a free, high-quality experience to gain user data and engagement.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    742 views1 page

    Spotify Resource Based View

    Uploaded by

    Prity Kumari
    Spotify has attained a competitive advantage in the music streaming market through its resources and capabilities, such as its large music catalog of over 50 million songs and its relationships with music labels. A key capability is Spotify's personalized playlist generation system, which analyzes the music tastes of its 240 million users to automatically generate tailored playlists like "Discover Weekly." This user data and curation system is difficult for competitors to imitate. Spotify also leverages its large user base of 240 million subscribers through its "freemium" service model, which provides a free, high-quality experience to gain user data and engagement.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    In an industry that was once plagued by piracy, Spotify, an idea conceived by two Swedish

    gentlemen who just wanted to listen to music, legally. Viewing Spotify through the Resource-
    Based View, I will analyze the resources and capabilities in the company’s digital content
    distribution value chain that are used to attain and sustain competitive advantage. Spotify’s
    competitive position in the music streaming market is supported by resources and capabilities
    similar to the core competencies of major competitors, such as Apple Music, Google Play Music,
    Pandora, and Amazon Music. Apple Music closely competes with Spotify who has clearly been
    in the industry for a longer time than its competitors.
    Spotify music catalog which is now ranging on ~50 million is closely tailed by its competitors,
    Apple, Amazon, and Google. The value creation is moderate since creating a catalog of this huge
    volume requires money and time thus giving Spotify a temporary competitive advantage.
    Spotify’s relationship with its labels can be counted as one of the core-competency of Spotify. It
    splits 52 percent of the revenue with the labels (Universal Music Group, Sony Music
    Entertainment, and Warner Music Group) and now it has proceeded to collaborate directly with
    the artists. This establishing of partnerships with right holders creates high value for Spotify
    which is difficult to imitate. One of the most highly regarded features of Spotify is the curation
    system. Spotify’s playlists – “Discover Weekly” which automatically generates a personally
    tailored playlist of two to three hours of music for its users every week. Spotify has found a new
    way to tap the collective intelligence of its 240 million users, turning their taste into a data layer
    that can be used to better personalize everyone’s experience (Davis, 2019). Over 8,000 artists for
    whom 50% of listeners are from Discover Weekly and 42% of listeners use Discover Weekly
    first thing in the morning (Popper, 2015). Apple music which still believes in human curation
    and has been reviewed to fail at giving a good classical music experience is lagging behind and
    so are the other competitors (Hi-Fi?, 2020). The curation system of Spotify is high value and
    rarity since the music taste curated as a result of the activity of around 300 million customers is
    leveraged strategically well to create playlists of lesser-known tracks giving the exquisite feel to
    music lovers thus building customer loyalty in effect. It is difficult to imitate and transfer and
    substitute simply because of the high volume of user data.
    The user data is composed of 240 million subscribers out of which 100 million pay for the
    services. Its “freemium” service is robust and provides access to the same playlists just without
    the ability to shuffle. This gives Spotify access to user data and keeps the users on the application
    since its competitors do not provide similarly high-quality services for free yet. This is an
    example of an IT asset barrier that would be difficult to be copied and provides Spotify at least a
    temporary competitive advantage according to Piccoli’s and Ive’s framework. Spotify’s core
    competencies that help sustain competitive advantage are its brand popularity that provides a
    sustainable or long-term competitive advantage for attracting more online platform users. Its
    partnership with device manufacturers like Samsung that make Spotify the default music playing
    application or with social media giants like Facebook which allows you to see what your friends
    are listening to. Recently Spotify collaborated with Uber so that you could access your playlist
    whenever you take an Uber. Spotify’s partnership with Brandpage helps musicians sell directly
    to fans. Another huge partnership with Ticketmaster is used for concert recommendations. These
    can be classified as complementary resources barrier according to Piccoli’s and Ives framework.

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