Spotify is a Swedish-based music streaming service launched in 2008 that offers over 60 million songs and a freemium model. Apple Music, launched in 2015, is a music and video streaming service that crossed 10 million subscribers in 6 months. While Spotify has more experience, Apple Music's rapid growth shows its potential. Spotify should be somewhat worried but not too much due to its unique freemium model and increasing popularity.

1. Apple music vs spotify
SPOTIFY:
Spotify is a Swedish-based audio streaming and media services provider, launched in
October 2008. It provides more than 60 million songs, from record labels and media
companies. By the end of Q4 in 2015 it had over 28 million subscribers. The speciality of
spotify is its freemium service which allows you to listen to songs for free for as long as we
want but it contains ads. Other features include sharing playlists and monthly subscription
and songs can be searched by artist, band, genre etc.
APPLE MUSIC:
Apple Music is a music and video streaming service developed by Apple inc. Executive
Jimmy Lovine has stated that the intention for the service is to become a "cultural
platform", and Apple reportedly wants the service to be a "one-stop shop for pop
culture". It was launched on 10th October 2015 and quickly crossed the 10 million
subscriber mark in only 6 months
STRATEGY FORMULATION:
Spotify was launched in 2008 that is to say they have 7 years of experience in the music
streaming industry but does this means that they shouldn’t worry about apple’s entry in the
industry . As simple the question is the answer is not so simple , apple music showed its
potential in just 6 months of launch by crossing the 10 million mark .Thus it seems that
spotify should be a little worried about apple’s entry but not much , why ?, because the
business model of both is very different where spotify offers the freemium service which
basically gives free access to its users without having pay a dime for as long they want .
Apple music offers 3 months of free access but after that the users need to pay .this gives
spotify the cost advantage although apple’s users quickly found it easier to use apple music
and sync it with their iphones or ipod . A review for apple music showed mixed results and
plenty of criticism saying its not intuitive, whereas Spotify offers best-in-class features and
an intuitive user experiences, paired with an extremely expansive selection of music and
podcasts. But again, apple music offers better quality where spotify struggles a bit. To sum
up both apple music and spotify have its pros and cons but still spotify should worry but not
too much because of its exponentially increasing popularity and increasingly unique
subscription schemes

2. STRATEGIC RESPONSE:
Spotify 2.0
There are a few steps in which spotify can gain competitive advantage over Apple music
• NO (or Less) ADS: A very frequent concern is that spotify has quite many ads
although spotify removes ads with the paid version it needs to lessen ads for free
users too this will improve the daily usage of the users. Where spotify places an ad
after 20-25 mins of streaming music it can probably increase that duration to 45-50
mins.
• BETTER QUALITY: The most common complaint is that spotify music has low to
medium quality of streaming music that is something apple is a good at and Spotify
needs to buckle up.
• VIDEOS: Spotify offers many lucrative services but video streaming aint one of them,
by adding video streaming it will create a one stop platform for music, podcasts and
videos hence attracting more users.
• INNOVATON: Innovation and creativity and the most essential factors to be a user
centric company same goes for spotify. research won’t hurt but will only help
understand how to create a more immersive platform for users
IMPLEMENTATION: The 3 areas for implementation are:
1)CULTURE:
Since spotify has differentiated itself from other music streaming services their organization
culture plays an important role. Where the work culture already emphasises on autonomy
over alignment which works well the only things is to improve it further. By making teams of
maximum 4 to 5 members which will work only a specific problem and will be given full
freedom to work in their style and group of such teams will interact in their own way and
have specific task or assignment this will increase their productivity and gives the employees
control to work according to their own goals
2)STRUTURE:
A key aspect of the strategy is to add video streaming services as well to give users a full
package. This will require redesigning of the website and app. secondly better-quality music
is to be delivered for which a completely different team can be assigned which focuses
bettering the algorithm and creating space for video streaming.
Innovation team must be added to conduct research and understand what users want and
how a more immersive environment can be created for them

3. 3)GOALS AND METRICS:
To gain immediate feedback of the users a special section needs to be added on the website
which will compare spotify’s older version and the new one which will create complete
transparency between them and users and also gain feedback, this can be put on a scale of
1 to 10 ,1 being major improvements needed and 10 being amazing
I. SHORT TERM GOAL: To improve the music quality and assign teams for R and D and
to add a video streaming and sharing platform. And add the new organization
structure and implement the culture
II. MEDIUM TERM GOAL: To get immediate feedback from the users comparing older
and newer spotify
III. LONG TERM GOAL: To successfully create a more immersive user experience,
attracting more users and expanding Spotify’s user base even further
PROJECTED GROWTH CHART FOR THE NEXT 5 YEARS*
* fictious numbers, only for project purpose
3.2 3.1 3 2.8 2.6
6.8 6.6 6.4 6.4 6.4
3.1 3 2.9
2.6 2.4
2015 2016 2017 2018 2019
Spotify
Users Quality Immersive Experience
3.2 3.4 3.5 3.8 4.1
6.8 7.1 7.4 7.6 7.9
3.1
3.5
3.9 4.1
4.5
2015 2016 2017 2018 2019
Spotify 2.0
Users Quality Immersive Experience