SpotifyBusiness Model

Free iTunes Library

Copyright(C) Rei Murakami 2

The Trajectory 15 million songs,*1

　　　　　　　　　　　　　 including popular ones

10 million users and

　　　　　　　 2.5 million paying subscribers ＊ 2

Valued at $1.1 billion,

　　　　　　　　　　　　 though founded in 2006 *3

Copyright(C) Rei Murakami 3*1 Slate (http://slate.me/njbEnB)*2 BBC (http://bbc.in/hcqcdx) *3 ZDNet (http://zd.net/rjQkQU)

Revenue Sources　 Free users – Advertising-Based

　 $9.99 a month subscription – Membership without Ad and limits

Copyright(C) Rei Murakami 4

Cost DriversLicensing fee to Music labels

$45 million dollars per year *1

Copyright(C) Rei Murakami 5*1 ballade.no (http://bit.ly/eBoKZ9)

Other ExampleDropbox

Evernote

Copyright(C) Rei Murakami 6

Freemium“Free ” + “Premium”

A typical business model among “web 2.0” start-ups

Copyright(C) Rei Murakami 7

What’s the Problem?Spotify’s Net Loss in 2010 was $41.5 million

Of $63.2 million total sales,

Advertising accounts for just 29 %

Spotify subscribers -10% of total users -

generate about 71 percent of the company's

revenues.

Copyright(C) Rei Murakami 8*1 Billboard.bizz (http://bit.ly/o30BsR)