IntroductionLately the internet has been changing a lot.
IntroductionLately there is a lot of popularity to the streaming platform Spotify. Celebrities like Jay-Z, Beyonce and Taylor Swift have announced to withdraw their albums from the platform. According to Taylor Swift the platform is not taking into account the fact that music is having some value to people (Cashmore, 2017). The streaming platform is popular with over 50 million subscribers, nevertheless the platform is having some flaws in the system. By receiving more subscribers, Spotify is receiving more complaints. Still the platform is the most used platform, moreover the platform is making use of a quite unusual business model. A new business model has arrived in the world, the “sharing economy” (Casilli, 2017). Spotify is the one and only music platform that is making use of this model, at least for now.Since the digital world exists on earth in 1992, the internet has been changing a lot. First we would only have a desk computer, but nowadays we have a laptop, mobile devices and tablets, so we can say the technological innovation has made big steps. Whether this is the right direction, is a different question. This new world is bringing positive, as well as negative effects on us. Because of all those changes there have been created new business models, one of them being the sharing economy. The sharing economy is not an economy based on ownership anymore, it is about using and sharing your products and services to others (Alt, 2016). This model is not new, it is just changing the rules. The big change is that previously you could share services and products from business to consumer, now it has changed to sharing from consumer to consumer. This change has been made possible by three drivers: changing consumer behavior, social networks, electronic markets, mobile devices and electronic services (Scholdan & Straaten, 2015).With all the upcoming digital firms, the music industry could not be left behind. Besides Spotify there are several music platforms where you could download music and place it on your mobile device like iTunes, and of course there is YouTube. At this time there was not a platform for music where you could stream it without taking in that much memory on your mobile device, and not being that expensive as well. This brought up the idea to introduce a music platform where online streaming became possible. You would not have to buy a CD anymore, you could just stream your music on a electronic device. In this way it is really cheap for users compared to buying a CD every time. You would not have to buy all different CD’s to listen to your favourite music, because you are able to stream every music number that you like. The most popular music app platform where all of this became possible is Spotify (McIntery, 2017). Spotify is founded in Sweden in 2006, what became THE music platform worldwide. Spotify is not only interesting for consumers, but for producers as well. It is created on a database to which every individual or group can upload their music. The consumer makes the decision whether the producer will earn some money with their songs. They can stream the music, and every producer gets paid for every streamer they have (Camp, 2015). Today’s music world is consisting out of several music platforms, in example: Spotify, iTunes, Tidal and Amazon Music. The facts do not lie, Spotify is the so called most successful app platform, based on the assumption of over 140 million active users of whom 60 million are subscribers, this all worldwide over 61 countries (Constine & Roof, 2017). The big question raises why so many people choose to use Spotify, out of all those different platforms. Other platforms should therefore consider to figure out why Spotify is that successful, and surely in what way Spotify is distinguishing itselves from the other platforms. To answer the previous question a literature review will be used. The literature consisted of articles with an academic background on the upswing of the business model: sharing economy, and music platforms. The material used was found on the electrical library at the University of Amsterdam, as well as other current universities. In the second section the business model of Spotify will be better explained. The drivers of the sharing economy will be elaborated on. In the third section will be explained how Spotify is competing the other platforms. This section will be based mainly on the participating of Spotify in the sharing economy. In the fourth section improvements will be given for further research into this subject. Theoretical frameworkAs said before, the three main drivers of the sharing economy are changing consumer behavior, social networks, electronic markets, mobile devices and electronic services (Scholdan & Straaten, 2015). The following text will elaborate on that assumption. Consumers changed their way of thinking, before they wanted to buy products or services to own it. Nowadays this has changed in temporary usage. Consumers now see the benefits of not owning, but making use of something. The benefits of which you can think are the following: it is less expensive to rent a car if you do not drive that much, so it is better for your portefeuille. An example to Spotify would be the following: you do not want to buy one CD to listen to only one musician, when you can buy a Spotify account to listen to all different types of music. Secondly, consumers are more aware of the environment, and the problems that come with this. They change their behavior in a way to what is better to the environment. Second driver of sharing economy would be the upcoming social network and interest in electronic markets. It is very popular these days to post everything online, i.e. FaceBook. If people like something, they will directly place their review on the internet. In this way the social network connects consumers to consumers, what makes it easier for producers to sell their products or services. Individuals can make use of the electronic markets to sell each other products or services, which is helping us to trust each other and making it easier to share our services. Surely another electronic benefit would be the mobile/electronic device! The devices help us the connect each other more easily, in example, it is possible to easily share our products on the device (Alt & Puschmann, 2016). In example this would mean that users can share their taste for music by addings songs to their playlist at Spotify. By producing an playlists the musicians can make use of this by trying to connect their music to the users tastes. Spotify is taking part of the sharing economy (Cave, 2016). Spotify is having online services and products, what makes it an online marketplace. They do not own any property. Spotify is offering the following services: you can stream the music published on the application by musicians those are willing to share their voices, you can make your own playlists but you can use other users their playlists as well as the public playlists. This part is making it interesting for a sharing economy namely; the musicians place their music on the application, but they need the help of the users to determine what sounds are popular nowadays. The users make their own playlists, in this way the musicians see what the trend is nowadays. Based on these trends they can change or adjust their music to satisfy the users even more (Shearman, 2011). As you can see there is a collaboration between customer and producer, customer and customer but producer and producer as well. This collaboration is important for businesses to cooperate, in other words the gap between trusting each other would be minimalized because the asymmetric information is decreasing. Spotify is taking part of the sharing economy, but how does this all started? The last 15 years have brought a lot of changement into the music industry. What came clear was the need for a new business model, namely the sharing economy. So, by this time Spotify was jumping in with the amazing idea to produce a digital platform, at which people could stream music. When hearing this, it does not sound like Spotify is different than any other music platform. You could change tracks, skip some parts of a song, view the other songs of an album, use the shuffle mode or repeat the last song, etc (Haupt, 2012). But, there is one difference, it is the experience of using the application and when listening to the music noticing how fast you can choose to listen another song. The subscribers of Spotify can listen to everything they want, and at any time they want to listen to this. Big feature of this point would be that you can download your songs in the available offline mode, where you could listen to the music without using your internet connection for it (Haupt, 2012).The question that raises in this economic world, is if this business model is that successful and Spotify being this successful, why is no other music application mimicking this theory. Of course, people are stuck onto the patent of Spotify but in reality you can always figure something out to resemble this application in another perspective. Three years ago another streaming headline came up in India, called the “Rdio’s” (Pakinkis, T. 2015). This would boost the idea to bring out other applications with using the same business strategy. At the moment Spotify is not active in India, so this would be the chance to boost this new Rdio’s music platform. India is a big country with 1.3b citizens, so you would say Rdio’s can grow into a big music platform. It is hard to compare to each other because Spotify is having quite a big database already, but you can conclude the race between global music platforms is still far from over. If platforms like Rdio’s ever going to compete Spotify is unclear, the future will tell. Although Spotify is quite successful, it is having its flaws too (Haupt, 2012). Like what is told in the introduction, some big musicians want to quit Spotify and eliminate their albums from the platform. The musicians are not content about the amount of payment they receive. Complaints of musicians are encouraging users to avoid the platform, because they want to stick loyal to their favorite artists. It is not clear whether this is having an impact on the popularity of the application. Complaints coming from the other side, the users, are having more impact on the popularity of the platform. First Spotify was not available on ChromeBook or other devices like the laptop, luckily Spotify changed this and fixed this problem. Another complaint is the need of an FaceBook account to subscribe to Spotify. The young popularity would not have any problems to this, but the ‘older’ people of the age around 40+ are able to see this as a problem. As well as the other complaint, this complaint has also worked out in a changement. Users are now able to sign up without using FaceBook to get in, they can subscribe by using their email address. To be concluded, there can be a lot of complaints about this music platform but reality shows us Spotify is continuously changing its platform to compensate in our needs of how the music application should perform in our eyes. However, there is one complaint in particular what Spotify has not changed yet. Spotify is disallowing some actions which should be possible because those are in fact legal: you can not take parts out of the tracks for using in another program. The music on Spotify is licensed, what is meaning that only the publisher (the musician in this context) can tell what to do with the song. Spotify is having no authority to let people copy a part of the song. Activists claim the music industry has not stopped changing, it will eventually lead towards the same industry as where water and electricity are. People will pay a small monthly fee to get access to all of the music worldwide (Kusek & Leonhard, 2005). In the authors their eyes Spotify is representing this future image. Spotify is offering high quality services with an open eye for innovation, customer needs and the competition within the music industry.Spotify connects the social networks to the platforms. As said before there is a collaboration with FaceBook. Users needed to sign up to FaceBook before they could make a Spotify account. Users also have the option to integrate your FaceBook with the Spotify account. In this way users can see what FaceBook friends of you are having an account on the music platform as well (Fleicher, 2017). Whenever you like a new song or you add a song to your playlists, you can post this on your FaceBook profile so you friends will notice and maybe add it as well. According to the authors of the literature used in this essay Spotify is planning to become even more successful, and other music platforms should try to copy the strategy as close as possible. The business strategy created by Spotify is innovative and popular in today’s society. There has been made good use of the sharing economy by connecting customers to customers, in example by connecting Spotify to Facebook. Lately there are complaints about the music platform, but Spotify is taking good care of this by trying to understand the complaints and compensate them by changing the platform to our needs. The collaboration between the producers and customers of Spotify would be their big feature. The past showed the collaboration between social networks and Spotify works out quite good. There were a lot of limitations faced in this research. First there was not an individually research, everything is purely based on the opinions of others. Surely the research is based on academic articles, and those articles were reliable. Still there were not that much articles about this subject. Spotify and the sharing economy are quite new concepts, so time scope was questionable. Deeper research into these concepts is needed to make sure the assumptions are made correctly (Thomas, 2011). Research takes time, for this research there have not been enough of time. As well needed is the more comparisons of music platforms, there has not been much research into this. The hypotheses has not been tested yet, for future research this would be needed. Future research can be focused more on the differences between music platforms, this would be important to distinguish the main driver of the popularity of Spotify. The success of Spotify started around 2011, this is not that long ago. Future research need to determine whether Spotify has to thank the sharing economy for their success, or maybe it was just some sort of luck. Expected the truth about Spotify would be their eye for innovation. They think bigger and in this way they can have a better connection with their public compared to the other platforms. As well Spotify is making more connections with other digital firms to grow bigger, in example the collaboration with FaceBook. Spotify is still increasing in size, meaning the market is growing bigger worldwide. In a few years from now this would not be expected to have changed, their list of countries would grow even more and the platform would become even more popular. Future research need to show the positive relationship between Spotify and the use of the sharing economy. By researching this question we will have the answer on the research question. When this will be tested positive, a lot of businesses can change their plans to be part of the sharing economy as well.ConclusionGiven the information above there can be concluded Spotify is distinguishing itselves from other music platforms, but the question is how. When you think about it in another way, would not all companies try to differentiate themselves from the others? The answer would be yes, but it is a hard task to figure out a way to differentiate yourself. Spotify is distinguishing itselves by providing other services, especially services who a lot of people admire. Concluded this would be a summarize of the services Spotify is providing compared to its competitors. In the first stage of Spotify it was directly connected to FaceBook, in this way it gained more subscribers. Secondly, Spotify noticed when there was a need to build a new business model, the sharing economy. Being part of the sharing economy is helping the platform to get into a closer relationship with their users, in example the users can make use of making their own playlists, as well as they can share them to others. This is not everything, users can share their lists and likes on their FaceBook profile as well, in this way Spotify gained a larger target audience. Spotify is innovative, in a way the users see. User noticed Spotify is working on their flaws noted in their reviews, furthermore Spotify is building up a trust relationship with their users by continuously working on the innovation of the platform. Spotify is not afraid of their competitors or new entrants on the market, they think they have the best strategy to compete. Hopefully Spotify will grow even bigger in the future and open up their market strategy even more, in a way that other platforms can learn from the best.