Spotify – Price Discrimination
|
Case Code: ECON085 Case Length: 13 Pages Period: 2018-2019 Pub Date: 2020 Teaching Note: Available |
Price: Rs.300 Organization : Spotify Technology S.A. Industry : Leisure & Entertainment Countries : Sweden Themes: Micro Economics, Pricing, Marketing Strategy |
Abstract Case Intro 1 Excerpts
Introduction
At the end of 2019, Swedish audio streaming company Spotify Technology S.A. (Spotify) reported 271 million monthly active users worldwide, up 31% year-over-year. Spotify, a software program, allowed users to download and stream a huge selection of music on their computers at home. It worked through a large collection of music, millions of tracks that users could search for and play using the free Spotify software. The company's revenue streams included its paid subscriptions, advertisements, and downloads. Spotify's freemium model with a free version of its streaming service, it persuaded a majority of its users to subscribe to the platform. At the same time, it attracted users through its paid subscription Spotify Premium that removed the play time limit as well as the ads that came with its free version. In 2014, Spotify launched the family version of the premium plans to enable account sharing among family members. At the same time, the company introduced a discounted premium subscription program for students. It offered ad-free and offline listening to students for US$4.99 a month. The discount could be used by the students for twelve months at a time and they could reapply the offer each year for a total of three renewals.
Spotify used several pricing strategies to bring as many consumers as possible onto its platform. It believed that its pricing plan could benefit the company by offering a bundle of accounts to different types of consumers. Spotify's prices differed across countries. Also, the prices it charged differed for different consumers depending on the features offered in the subscription plan. While Spotify's differential pricing seemed justified, it needed to work out monetization strategies taking into account its increasing sales and marketing costs, analysts said. Given its market position in the music streaming world, the company would have to follow a cautious growth strategy in addition to a pricing strategy to sustain its growth, they said.
Buy this case study (Please select any one of the payment options)
| Price: Rs.300 |
Price: Rs.300 | PayPal (7 USD) |
