Spotify SWOT Analysis
Cultural Products Economic Analysis
In this article, we will carry out the SWOT analysis of Spotify Group. This strategic analysis tool allows us to understand better the internal and external environment of a company or a sector of activity. Therefore, it is regularly used in addition to other analyses. We will, thus, study the strengths and weaknesses of Spotify, which constitute the internal diagnosis of the group, as well as the opportunities and threats closer to the external diagnosis in Spotify SWOT Analysis post.
Spotify SWOT Analysis
Introduction
Spotify is a streaming company of Swedish origin. It was founded in 2006 but officially launched in 2008. Daniel Ek and Martin Lorentzon created it. The platform will quickly establish a partnership with the social network Facebook, ensuring rapid notoriety worldwide.
In 2024, Spotify will have more than 600 million active users (615 million), 19% more than last year. Subscribers to the premium range are also increasing significantly, with 239 million active members, or 14% more than in 2023. In the first quarter of 2024, the company’s turnover is 3.6 billion euros. In 2023, the annual turnover amounts to 13.24 billion euros, an increase of 12.9% compared to 2022. However, the platform needs some help to be profitable, losing 532 million euros.
Spotify Marketing mix, business model, SWOT analysis, Porter’s 5 forces, and PESTEL analysis
SWOT Analysis of the SPOTIFY Streaming Platform
Internal Factors – Strengths
Spotify offers a wide range of content, which gives it an advantage over some competitors. The number of subscribers continues to increase yearly, and the group has acquired worldwide notoriety over time.
On the platform, consumers can find more than 100 million different pieces of music, 6 million podcasts, and more than 350,000 audiobooks, which are becoming increasingly popular with consumers. Thanks to this new content, Spotify expanded its target worldwide.
In addition, the group is present in 180 countries, allowing it to significantly increase its market share and turnover. The recommendations on the platform appear more relevant, substantially improving the user experience in the long term, thus further conferring better competitiveness to the group.
Marketing Mix – Spotify
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Internal Factors – Weaknesses
Spotify is experiencing and will continue to experience very heavy competitive pressure in the future; therefore, there are many challenges to face in 2024.
We spoke above of the platform’s lack of profitability, whose losses remain significant, amounting to 532 million euros in 2023.
In addition, Spotify has less exclusive content than other competitors; think of Apple Music, for example, which is known for regularly having exclusives with certain artists. Suppose we continue the momentum of Apple Music. In that case, this platform will be very integrated into Apple’s software suite, further improving the experience that fans of the Apple brand can have. The same goes for the Amazon group, linked to Alexa, its voice assistant, which has existed for several years.
Spotify has other areas for improvement, such as the need for video content compared to its competitors. Think of YouTube Music, although the subscription is a little more expensive. Apple Music will include clips and shows related to the musical field more than Spotify, which will remain behind in the field but is gradually managing to catch up.
When it comes to pricing, Amazon can sometimes appear to be more advantageous since additional options are available to Prime users.
Spotify SWOT Analysis
External Factors – Opportunities
Spotify is in a market that has an increasingly significant presence in emerging countries. This allows them further to increase their notoriety and competitiveness throughout the world.
The market is reaching a saturation phase in France and many other countries, so offering this type in different countries truly represents an opportunity.
Note also that podcasts are gaining momentum among younger people, but not only since the audience is increasingly larger. The domains are more significant and better listed, which allows Spotify to gain another clientele and compete with other, more specialized platforms.
Furthermore, Spotify ensures a constant presence on the internet and social networks, where the platform will have many fans and subscribers. Social networks allow Spotify to maintain almost constant interaction with Internet users and promote any new features or changes on the platform. This gives Spotify a more dynamic, more modern image.
The arrival of artificial intelligence is also an opportunity; it will improve the long-term experience of Internet users.
External Diagnosis – Threats
Competition is one of the platform’s leading threats. Today’s main competitors are Deezer, Apple Music, Amazon, and YouTube Music, a non-exhaustive list.
Digital Strategy – Deezer
YouTube user characteristics, with Gen Z as potential consumers for influencer marketing
Furthermore, Spotify’s revenues may fall due to the numerous regulations regarding copyright and even record labels. The group is sometimes criticized because of the payments owed to the artists; these payments are relatively low compared to other platforms.
Spotify must pay particular attention to its marketing to align with customer expectations. Data protection must also be a constant concern for society in a sector implementing ever-stricter regulations.
Conclusion | Spotify SWOT Analysis
Spotify is a platform with a solid reputation but still needs to improve its profitability in the long term. The services offered better fit new customers’ expectations and needs and with competitive pressure, which is ever more vital. Even though Spotify remains one of the most downloaded apps in France and many other countries, this platform has some drawbacks. The company remains a world leader to this day, but to ensure better profitability, it will be necessary to offer its users more and more new features.
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