How Spotify beat Apple at their own game | Sidebean

0:00College football is back. So, Hilton called to me the superstition concierge to make your fan rituals a reality. Need a room to match your lucky number? We got you. Want to make sure our team doesn't wash your lucky jersey? Oho, that smells lucky. Hilton's unmatched hospitality can keep up with any superstition. Even a marching bandwink up call it 555 and 55 seconds. Hit it! When you need a team that will do whatever it takes on game day, it matters where you stay. Hilton, for this day. When you've got a job to do, Lowes knows how to help you keep it moving. Milo's pro-rewards members save more with member-volume discounts on eligible orders through a quote of $2,000 or more. Plus, save time with job-side delivery and select purchases. Not a member? Join for free today. Exclusions, more terms and restrictions apply. Can't be combined with any other discount, including but not limited to contract and or special price. Lowes TV programs subject to terms and conditions details at Lowes.com slash terms subject to change.

1:00This episode is brought to you by Born in Roma fragrances by Valentino Beauty, the iconic fragrance duo. Donna Born in Roma Ode to Parfume is a feminine fragrance featuring juicy black current central jasmine, woody cashmurren and warm vanilla. Its masculine counterpart, Wilmo Born in Roma Ode toilette, has notes of fresh violet leaf, aromatic sage, green vetiver, spicy ginger and mineral salt. Shop at macy's.com This video was brought to you by Slightbean Founders Edition. Get help from our team in your pitch-stake, your financial models and your fundraising. Sign up with the link in the description. In life, there are some hard questions like, Pepsi or Coke or iPhone, Android, Mac vs PC. When it comes to music and podcasts, it seems the answer is pretty clear. Spotify is king. How did this small company be out giants like Apple at their own game? We'll tell you all about it in this episode of Company Forensics.

2:11The Origins In 2006, back when listening to music was either expensive or illegal, Swedish entrepreneurs Daniel Ek and Martin Lörnson wanted to make music more accessible, through streaming, so Spotify was born. But they needed to have record labels on their side, otherwise the app would have very little to offer. Fortunately, the music industry also needed to shed the vestiges of the past. Ek asked the labels to open up, and they did at a price. By 2009, multiple record labels owned 20% of the company. But for Spotify, this meant money. And the guarantee that Spotify would have mainstream music. They launched in 2008 with both a free service and a paid subscription. But Spotify got their big boost in 2009. When Mark Zuckerberg updated his Facebook status with, Spotify is so good. At that time, Spotify wasn't even available in the US. Talk about hype. Lee Cashin won a Facebook leading investors had his eyes set on the app. And Zuckerberg was trying to venture into music. Spotify finally launched in the US in 2011, but with reduced features for free users.

3:16You see, the four major labels in the US believed in Spotify. But they wanted it to be solely for paid users in the US, which wasn't feasible in Spotify's view. The company took to other strategies, such as an integration with Facebook, as people could now use their profiles to create Spotify accounts in seconds. However, competition in the US was fierce, with software like Pandora or Rhapsody and LastFM. Success and problems. Let's take Pandora. It was a free music streaming service that relied heavily on ads. Spotify, on the other hand, offered a paid membership, which eliminated ads. Behind plenty of features and a smooth, engaging platform was X of session with excellence. He wanted the best, listening experience to convince users to pay the monthly $10 bucks. After all, that's how he had gotten 1 million paying subscribers by March 2011. He aimed to replicate that success in the US. While ad-free music is the best music, Spotify also offered more mobile tools like playlists and storing songs, which Pandora didn't. And the US loved it.

4:19The app went from 1 million paying users in March of 2011 to 2 million by September of that year. The brand also became a staple in American culture. Barack Obama launched his playlist before the 2012 election. Coca-Cola partnered with the Giant and even Metallica launched its entire catalog on Spotify. All this meant that by December of 2012, Spotify already had 1 million paying subscribers in the US alone. But democritizing music, as Ek won said, wasn't a smooth ride especially for artists. You see, Spotify pays the owner of the rights about $0.006 to $0.0084 per play. The owner then splits up the money between the label, artists, producers, etc. Artists didn't like that. In 2011, Adele and Spotify couldn't agree on the release of her album, 21, so the singer chose Rhapsody instead exclusively for paying subscribers. Other big names like Tool and Tom Yorke have criticized Spotify for weakening the already bleak opportunities artists have.

5:21Just to earn approximately minimum wage, an artist would need 400,000 streams per month. Perhaps the biggest feud was with Taylor Swift. In 2014, she didn't release her album 1989 on Spotify. Then removed her entire catalog from Spotify, the main issue being Spotify's free tier. Instead, she released 1989 on J.Z's title, a paid service. Then in 2015, Apple Music announced three months free trials with artists receiving no royalties from those trials. And she was pissed, Apple listened, and dished out royalties. But Spotify was becoming a big name. It had gone from 10 million paying users in 2014 to 50 million by 2017. That's hard to ignore, even Adele released her album 25 on Spotify. So Universal Music Group swifts distributor negotiated to allow artists to choose windows of exclusivity for new releases. Taylor Swift went back to Spotify, and it all seems fine for now. But keep this exclusivity issue on hand for later.

6:21Then the Facebook Alliance Gartner criticism as new users had no choice but to use their Facebook account to create a Spotify account, which wasn't appealing at all. Spotify eventually yielded it. But then through open graph, activity between Spotify and Facebook became more visible. The songs you listen to now appeared on the revamped feed. Many articles popped up explaining how to separate the two programs as much as possible. It seemed people didn't enjoy publicly displaying their guilty pleasures. And now let's talk about Apple. Spotify vs Apple. Apple is a big player. We all know that, but it doesn't have all the tricks up its sleeve. People want to feel unique and Spotify understood that, so they created the wrapped year in review. Every year, Spotify reminds you of musical genetics, your favorite songs, artists, and podcasts. It also allows you to share your results on Instagram, Twitter, and other social media. Apple music users on the other hand can't quite do the same. They do have a year and summary, but it's not as shareable or interactive. Such is the wrapped success. Some Apple music users questioned their loyalty and their friends supported the idea.

7:26Here's the exclusivity issue again. Apple music traditionally worked to great success. Call us footballers back. So Hilton called to me the superstition concierge to make your fan rituals a reality. Need a room to match your lucky number? We got you. Want to make sure our team doesn't wash your lucky jersey? Oho, that smells lucky. Hilton's unmatched hospitality can keep up with any superstition. Even a marching band wake up call at 555 and 55 seconds. Hit it! When you need a team that will do whatever it takes on game day, it matters where you stay. Hilton, for the stay. When you've got a job to do, lows, lows, how to help you keep it moving. Milo's pro rewards members save more with member volume discounts on eligible orders through a quote of $2,000 or more. Plus, save time with job site delivery and select purchases. Not a member? Join for free today. Exclusions, more terms and restrictions apply. Can't be combined with any other discount, including but not limited to contract and or special price loyalty programs subject to terms and conditions details at Lowes.com slash terms. Subject to change.

8:31This episode is brought to you by Born in Roma Fragrances by Valentino Beauty, the iconic fragrance duo. Donna Born in Roma, Ode to Parfum is a feminine fragrance featuring juicy black current, central jasmine, woody cashmurren, and warm vanilla. Its masculine counterpart, Womow Born in Roma, Ode to Dualet, has notes of fresh violet leaf, aromatic sage, green vetiver, spicy ginger and mineral salt. Shop at Macy's.com. With exclusive content with artists like Frank Ocean, Drake and Taylor Swift. Drake even broke several records by having views album only in Apple Music except four songs for a determined period. But the music industry had a love hate relationship with exclusivity as it affects revenue. Yes, a launch with Apple means heaps of dedicated marketing but fewer listeners in the end. Artists like Kanye West criticized as say exclusivity was fucking up the music game. A game in which Spotify had around 42% market share in the music streaming industry in 2017.

9:34And it's not like Spotify is in willing to work with exclusivity as we've seen. But this company beats giants like Amazon, Google and Apple. How? Well, it's about numbers and features. Spotify changed the way people consumed music through several critical elements. It was no longer about a long awaited album but rather a steady flow of unlimited music that appealed explicitly to each listener. Take the Discover feature, a series of machine generated playlists that follow a carefully constructed process in which Spotify takes what you listen to regularly and looks to other users and their listening history to match those songs. Then it navigates the web to gather more information about specific songs and lyrics. Finally, it analyzes the songs you hear to find similar tracks in tempo beat on genre. In a 2017 internal report, Spotify stated that machine generated playlists comprised more than 30% of all listening activities. So Spotify pretty much has figured you out. Don't be shocked if it recommends therapy when you play sad songs over and over again. And artificial intelligence doesn't end with music.

10:40Podcasts. 2020 has seen the rise of other forms of entertainment mainly due to the lockdown, one of which is the podcast. On a year-on-year basis, Spotify podcast mentions have increased by 67% while Apple's rose 45%. The company's venture into podcasts began in 2015. From the start, it invested heavily. Then in 2018, it opened its podcasts for Spotify to creators all over the world. Why open it up? Well, in 2017, Apple had a 55% market share of podcast content. But it was only available in 20% of devices worldwide. So the rest of the market is up for grabs. Then they invested heavily in purchasing giants, gimli and anchor to relevant podcast networks for $340 million. The result? Well, now Spotify hosts over 1 million different podcasts, more than any other software in the world. Users have gone from 131 million in 2017 to 286 million in 2020, and total revenue doubled.

11:43But Spotify came in very late to the podcast game, which had always been under Apple's control. So what was the difference? According to a Neiman lab, there are critical differences between the two. Spotify users leaned more towards entertainment, while Apple podcast users focused more on news. Then there's availability. With over 1 million podcasts and advanced AI, the chances of finding other podcasts interesting are higher with Spotify. While with Apple, it's harder for lesser known podcasts to appear in the featured section. And then there's integration with Spotify, both podcasts and songs are available within the same app, rather than having two separate apps. X obsession for seamless, integrated, high quality listening pays off at to that the latest AI and data analysis, and Spotify has a winning combination. The future. Spotify isn't home free, especially when it comes to money. The famous free to paid user churn is still a challenge. They did see profit in 2019, but projections indicated it wouldn't last, and it didn't. In 2020, so many advertisers withdrew that it failed to meet revenue expectations, and this was a company that didn't rely entirely on ads.

12:55Their average revenue per user also declined 9% year in year. Some experts consider this decline is due to the company's expansion to markets in which it charges less per month, but they also warn that ad revenue will be critical for Spotify. As they focus on podcasts, which are free for all users, ads become a big part of the business. Then there's the technological side to it. Yes, Spotify is at the forefront of AI and user experience, but competition is getting stiffer. All those big names are trying to catch up, but Spotify has an ace up its sleeve. Yes, they dominated music. Now they're going after the video market, both free and paid users will now be able to watch videos from select podcast creators contrary to YouTube, in which only paid subscribers can enjoy such content. For users, it means more content for creators, more options, for the competition it's yet another challenge. For now, Spotify knows us too well, and that's bad, but perhaps they have a song to make us feel better. So what is your favorite app and where do you listen to your music and your podcasts?

13:58We might be launching a podcast soon, so we want to know. Let us know in the comments, and don't forget to hit that subscribe button. See you next week. This episode is brought to you by Born in Roma fragrances by Valentino Beauty, the iconic fragrance duo. Donna Born in Roma Ode to Parfume is a feminine fragrance featuring juicy black current central Jasmine, Woody Cashmurren and warm vanilla. Its masculine counterpart, Womow Born in Roma Ode to Dualet has notes of fresh violet leaf, aromatic sage, green vetiver, spicy ginger and mineral salt. Shop at Macy's.com Fall has never looked or tasted this good. Sweet Greens Fall Harvest Menu is back with seasonal favorites dressed to impress and made to be devoured.

15:05Warm roasted sweet potatoes, crisp apples, maple glazed brussels and crave worthy flavors in the autumn harvest bowl, maple glazed salmon plate and roasted bacon brussels side. The season's most desirable menu has returned to sweet green featuring Fall's best dressed. Make your move, order on the sweet green app. Mr. President, my company formed me of the explosion on my rig along to Per second. Causing massive water displacement and triggering the tsunami. They all heat the blame all may. Tom Cruise is. Digger Donna's into the specimen and digger is gonna dig a top. Find a doctor is hard enough. Find the right doctor even harder. Someone who takes your insurance has an available appointment when you need one and feels like someone you can actually open up to.

16:06That's where Zock.com's in. Download the Zock.com app to search and compare doctors by specialty insurance and availability. Read real patient reviews. Find the right fit for you and book instantly because getting seen by the right doctor matters. Zock.com ready to be seen. Download the Zock.com app today. Hi there. I am fully charged and here to tell you Toy Story 5 is now on Disney Plus. It's been too long, Cowboy. Whatty Buzz and Jesse are back for a brand new adventure with some seriously cool new tech. What? Holy butter scotch! You said it, Jesse. So, save your batteries and watch the global phenomenon at home. And the best part, it's perfect for the whole family. Share up your movie night and watch Disney and Pixar's Toy Story 5 now streaming on Disney Plus rated PG.