Spotify has shown over the last quarter that it continues to expand to a new marketplace and grow with innovative strategies. Their new services like Sound trap and Soundbetter have helped them to double its paid subscribers’ base with more innovations in the pipeline.
Marketplace for all stakeholders
Spotify’s two-sided market strategy not only deals with listeners but also the content creators by ensuring that tools are available to listeners, artists, publishers, songwriters, and podcasters. This has allowed Spotify to connect artists with fans, collaborate with others, engage and grow and monetize their followers. With more than one million artists earning from this platform, Spotify has made this marketplace a win-win situation for all stakeholders. Even music marketing service providers are actively promoting this platform which allows artists to buy Spotify followers which are real and genuine.
Spotify’s double-pronged strategy of earning higher revenue has been through more paid customers and cost-cutting efforts on marketing. Favorable negotiation on lower licensing rates with brands and content creators led to lower operating expenses and the strategic use of marketplace with value-added services to users meant a higher number of paid subscriptions.
- Spotify launched a year-end campaign in 2019 to drive engagement with the existing artists on the Spotify platform and also to recruit new ones. This campaign allowed artists to summarize and highlight their work on Spotify throughout the year and their fans’ response towards their work.
- Spotify earned higher revenue through ad-supported free users and premium segment paid subscribers. It was seen that promotion for native content was more lucrative as it earned higher margins.
- In 2019 Spotify launched a new tool called Beta in the US market. This tool allowed Spotify to track the customers listening preference and their feedback. This was done to ensure a better product mix that was aligned with the users.
- Spotify has a decent conversion rate of 30% for listeners and clicks through rates.
- Premium segment users found recommendations which were sponsored as valuable and relevant.
- The Beta tool was found to be effective in helping the artists connect with their targeted audience smoothly.
- The conversion from ad-supported free users to premium segments was due to continuous engagement and retention of the listeners.
- There is a plan to focus more on the podcast segment and place them on the Spotify metrics in the future.
- The trends have so far been positive and Spotify has been continuously processing the relevant data to ensure a better streaming experience for all.
Future Outlook for artists
With the music streaming industry becoming competitive by the day with more new players entering the arena, Spotify will longer be the only platform to offer exclusive content. The audience will have a vast choice of choosing their favorite music platform. If you are an artist and want to know the best techniques and platforms on how to promote your music, then there are music marketing companies who can assist in providing the best deal.