spotify case study

Brought to you by:

Spotify: Face the Music (Update 2021)

By: Govert Vroom, Isaac Sastre Boquet, Abhishek Deshmane

By 2021, streaming had become "the" way to consume music, revitalizing an industry that was seeing double digit growth rates for the first time since the 1990s. And with its 155 million paid…

• Length: 31 page(s)
• Publication Date: Oct 1, 2021
• Discipline: Strategy
• Product #: IES869-PDF-ENG

What's included:

• Teaching Note
• Educator Copy

$4.95 per student

degree granting course

$8.95 per student

non-degree granting course

Get access to this material, plus much more with a free Educator Account:

• Access to world-famous HBS cases
• Up to 60% off materials for your students
• Resources for teaching online
• Tips and reviews from other Educators

Already registered? Sign in

• Student Registration
• Non-Academic Registration
• Included Materials

By 2021, streaming had become "the" way to consume music, revitalizing an industry that was seeing double digit growth rates for the first time since the 1990s. And with its 155 million paid subscribers and 355 million total users, Spotify was undisputedly the most popular music streaming service in the world - for the year of 2020, it posted record revenues of 7.88 billion. Yet, despite those numbers, in all its history, Spotify had never been able to post a yearly profit. The company had an operating loss of $293 million in 2020 (with a $581 million net loss) and was projecting an operating loss of $150 - $250 million for 2021. The case goes back to review the crash of the music industry in the 2000s, when digital formats and P2P services like Napster marked the heyday of music piracy. The case details the response of the music industry to digital formats - first a hostile one and then a slow embrace as the first successful business models were developed: digital downloads first, led by Apple iTunes, and streaming later, heralded by Spotify. The case then presents the history of Spotify, its business model, and financials, before analyzing its competition. Apple Music had already gained 72 million subscribers since its launch in 2017, while Amazon Music Unlimited had reached 55 million. Both were trying to catch up with - and even surpass - Spotify with new features, exclusives, and integration with their respective ecosystems of apps, services, and devices. The case concludes presenting the Spotify's ""audio strategy"", which saw the company spend nearly $1 billion in podcasting companies and technologies. CEO Daniel Ek believed this content would be the future of Spotify, but some analysts were not as confident. Was the audio strategy the right plan? Did Spotify have a path to profitability?

Oct 1, 2021 (Revised: Oct 3, 2021)

Discipline:

Industries:

Broadcasting and streaming media industry, Goods, trade, and consumer services, Music industry

IES869-PDF-ENG

We use cookies to understand how you use our site and to improve your experience, including personalizing content. Learn More . By continuing to use our site, you accept our use of cookies and revised Privacy Policy .

The Soundtrack to Growth: A Spotify Marketing Case Study

• Growth Marketing

At Spotify’s 2023 “Stream On” event, CEO Daniel Ek announced that the platform had just passed half a billion monthly listeners across 184 countries and markets . Looking ahead, Ek aims to grow Spotify to 1 billion users by 2030; an ambitious — but not unwarranted — goal, considering the immense growth and success that Spotify has achieved over the past few years. 

From viral organic marketing strategies to bold moves in the metaverse space, here’s an in-depth analysis of everything Spotify did to become the world’s most popular audio streaming service today. 

What Is Spotify’s Marketing Strategy? 

Spotify’s marketing strategy is centered around the three main principles of personalization, emotion, and data. Everything that Spotify does begins with considering the end user; whether it be through personalized playlists or user data-driven campaigns, they are a brand that truly knows how to focus on making sure their audience receives the most positive experience possible. With that, let’s break it down.

Personalization

Spotiy has always been at the forefront of personalization — they even have a dedicated role of a VP of Personalization . Through machine learning, Spotify leverages users’ listening habits and historical behaviors to inform the types of albums and playlists that are shown on a users’ home screen. Reinforcement Learning, or RL, is then used to predict what a user might want to listen to in the future, so as to maximize the ultimate, long-term reward that users get from the platform. Recently, Spotify launched a new AI DJ feature that offers a curated selection of music with spoken commentary about the tracks and artists. This new AI feature marks a shift wherein Spotify turns into more of a lean-back, passive listening experience that’s based more on the platform’s recommendations rather than intentional user selection. Spotify is using a Reinforced Learning with Human Feedback model where users are basically teaching the AI to become better at their job every time they play or skip a song — hence creating the perfect foundation for continual personalization and improved recommendations. 

Spotify is a tech platform that really understands the value of tapping into human emotion to build user engagement and loyalty. Emotion can be an incredibly powerful marketing tool — particularly when it comes to music. Spotify really leans into the relationship between music and emotion, and builds their strategy around what music means to people. For example, many people associate music with the idea of memory and nostalgia, so this year Spotify created a “Playlist in a Bottle”, which lets users create a musical time capsule that will be unlocked in January of 2024. Since users have to wait until 2024 to “unlock” their playlist, this nostalgia-steeped feature essentially locks  a user into their Spotify subscription for another year, and provides an opportunity for organic UGC and social sharing when the time eventually comes around. 

Music is also often seen as a space for connection and love, which is why they created the “Spotify Blend” feature — a daily-updated playlist that combines the music you and another person listens to based on your shared listening activity. For Valentine’s Day, Spotify took this a step further and allowed users to view their personalized taste match score and compare their music tastes to a partner or significant other. It’s a sweet sentiment that is extremely fitting given the inherently emotional nature of music, but it’s also a genius way for Spotify to spur greater engagement and viral sharing. 

Spotify has access to huge amounts of listener data — so why wouldn’t they use it to their advantage? One of Spotify’s most well-known campaigns was all about data, yet it somehow still felt incredibly human and relatable. What Spotify did was they pulled user insights from large amounts of data, and framed those findings in a way that still feels deeply human. The result was a campaign that combined humor with leveraging user data, making users feel like they’re a part of a larger community of listeners. 

Who Is The Target Audience of Spotify?

Spotify’s target audience skews towards the younger Gen Z and Millennial generations, with a slight female majority and a geographical focus on the United States, Europe, and Latin America. That being said, Spotify’s audience is still incredibly diverse, with users in over 184 different countries and markets. This diversity calls back to the importance of user personalization, so that Spotify can create a customized experience for each user that is specific to their listening habits and music preferences. 

What Are The 4 P’s of Marketing For Spotify?

Now that you understand the main pillars of Spotify’s marketing strategy, here are the 4 P’s of Spotify’s marketing. 

Product: A look into a Spotify’s vertical scroll discovery 

One of the biggest features Spotify announced at their 2023 Stream On event was a new mobile interface built for deeper discovery. Much like TikTok or Instagram, there’s a vertical scroll that allows users to explore new album covers, short canvas clips or recommended podcasts. This fundamental change in the product interface reflects an overall shift towards a more discovery-focused model, where users not only listen to music they like but also find new songs and albums that are similar to their listening tastes.

One thing is clear: Spotify is no longer just a music streaming platform. With this new interface, Spotify is borrowing elements from TikTok, Instagram and Youtube, thus turning Spotify into a holistic experience encompassing not only audio, but also short-form video, album art, and more. 

It’s important to note that this more discovery-based approach may be Spotify’s attempt at solving the issue that they’ve been having with podcasts recently. Spotify acquired podcast production house Gimlet Media in 2019 for a reported $230 million, and purchased The Ringer network in 2020; all in all, Spotify spent over $1 billion as an investment into the podcast category. Despite the ambitious investment, Spotify’s podcasts are not yet profitable, and the platform only brought in roughly $215 million in revenue through podcasts in 2021. The benefit of the vertical scroll discovery format is that it gives users a new avenue to discover new content, and empowers creators to share and promote their content within the platform. Will this discovery model solve Spotify’s podcast problem? Only time will tell — but it was definitely a strategic move on their part. 

Price: The freemium model in action

Spotify’s pricing strategy uses a freemium model that offers a basic service for free and an unlimited, ad-free premium service for a subscription fee of $9.99 a month. The advantage of this freemium business model is that Spotify can attract and acquire a large number of users through the appeal of a free service, and then convert those users to paying subscribers once they have already established a positive relationship with the customer. Evidently, the freemium model has been working for Spotify, as they have a 46% conversion rate to paid services, compared to just 30% for Slack, 4% for Evernote, and 0.5% for Google Drive. 

The challenge with a freemium model comes later at the retention stage, as Spotify would have to continually retain their paying customers to maintain their stream of subscription revenue. Spotify has maintained an 85% retention rate , even despite their immense new user growth, demonstrating their strength in not only acquiring new users but also keeping them. At the heart of Spotify’s retention strategy is their ability to capitalize on the social and network effect on listening behaviors. Once a user subscribes to Spotify, they become part of a larger network of Spotify users, and they feel connected to that community through following a friend’s playlist, making blended playlists, or comparing their Spotify wrapped top artists. Once Spotify is able to give a user a sense of belonging, they are more likely to continue paying for the platform in order to continue to engage with others through the platform’s social sharing features. 

Promotion: The art of engineered virality 

Since its launch in 2016, Spotify’s viral “Spotify Wrapped” marketing campaign has dominated online conversations and social media platforms come every December. The campaign was so popular that it became some sort of an annual tradition or a rite-of-passage for die-hard Spotify users. In addition to being widely shared on social media, Spotify Wrapped is also the subject of countless memes, satirizations and copycat recreations. It went from marketing campaign to viral social phenomenon, and quickly rose to its status as the prime example of engineered virality and the power of social media trends.

On the surface level, Spotify Wrapped was created with the goal of giving users an opportunity to better understand their music tastes, and celebrate a year of listening by looking back at their favorite songs, artists and genres; but that’s only the beginning of it. Spotify Wrapped was created with the behaviors of social sharing in mind. Spotify recognized that music is by nature something that people like to share and show off, so they took that natural instinct and turned it into a tool for engineered virality and rapid word of mouth. Every part of the Spotify Wrapped function was designed and optimized for social sharing: 9:16 image dimensions were ready for Instagram Story posts, colors were designed to be eye-catching and attention-grabbing, and “share” buttons were scattered throughout the entire experience. Every time a user shared their Spotify Wrapped on their story, they were directly contributing to the viral loop of social sharing by reminding their own follower network to do the same. 

Genius? Yes. Organic, cost-effective, and sustainable? Yes, yes, and also yes.  

Place: Expanding into the metaverse 

In May of 2022, Spotify expanded their product into the metaverse with the launch of “Spotify Island”, a “paradise of sound” where fans and artists from all over the world can connect and explore a digital world of sounds, quests, and exclusive merch. Spotify is the first music-streaming brand to have a presence on Roblox, marking a significant change in the way we think about how we think about “place” when it comes to music streaming platforms. 

In terms of place, Spotify exists across any device that can access the app — be it a smartphone, laptop, smart speaker or voice-activated home assistant. With their expansion into the metaverse, Spotify pushes the boundaries of physical and digital spaces by creating a virtual universe to foster greater community and brand awareness. With Spotify island, the music streaming platform is no longer limited to its app itself; rather, it becomes a recognizable brand that transcends its functional manifestation. Spotify Island is designed to be incredibly true to its brand, with lots of green, music easter eggs, and shapes and icons that users will recognize from the app’s interface. 

On Spotify Island, users can mingle with artists, complete interactive quests, and unlock exclusive content. By creating a space where artists and listeners can interact with each other and with the brand in a whole new way, Spotify is able to immerse users in the world of their holistic brand identity, no matter how and where they choose to listen to their music. 

How Does Spotify Market Through Social Media?

In addition to Spotify’s now-viral Spotify Wrapped campaign, the tech company is skilled in marketing their platform through social media in a variety of different ways. At the core of their social media strategy is the principle that music can and should be a cross-platform experience, one that is not limited to the confines of the Spotify app itself; we already see this happening in their expansion into the metaverse, but this is apparent in their approach to social media as well. Every single experience and touchpoint on the Spotify app is designed to be easily shared across a variety of social media platforms, a move which is just as strategic as it is convenient. According to Spotify’s internal research data, 42% of Gen Z Spotify users in the U.S. said they’ve heard a song on social media and then searched for it on Spotify. While previous generations of music listeners may have been flipping through CDs at the malls or searching for vinyls at their local record store, today’s modern music listeners are seeking out new tracks and artists through social media. Evidence of this avid behavior of music discovery through social media proves particular importance for Spotify to hone in on their cross-platform experience and enable seamless discovery of their music. 

Spotify is not only marketing through social media, they are also evolving their product to replace behaviors that used to primarily exist on social media. In other words, much like social platforms like TikTok or Instagram, Spotify is broadening its offerings to become a space for eCommerce, music news, and information search in addition to music streaming. In their recent partnership with Shopify , artists can now sell their merch and/or concert tickets directly through the Spotify app. This “retail-ification” of the music streaming app is a win-win for both artists and Spotify, as it gives artists a platform to promote their work in the app itself, and it likely increases the amount of time that Spotify users spend on the app. Hence, in a strange chicken-or-the-egg type of situation, Spotify is simultaneously promoting itself through social media, and evolving to become a social media platform in itself to become less reliant on social media platforms in the future. 

What’s Next for Spotify?

There’s no denying that Spotify has been widely successful in their marketing strategy these past years — and they have the numbers to prove it. As of Q4 of 2022, Spotify has 489 million monthly active users . Still, listening habits and user behavior is a rapidly and continuously changing landscape, and in order for Spotify to retain its existing user base and maintain its success, the platform must also evolve to fulfill the diverse needs of today’s modern consumer. 

Will Spotify’s new vertical scroll discovery approach solve their podcast problem? Will Spotify Wrapped continue to go viral year after year? Will their social media strategy change in response to all the changes being implemented across Meta and Twitter? Spotify has many challenges ahead of themselves, but if their history of strategic thinking shows anything, it’s that this is a company that truly knows how to push the boundaries of growth and innovation. 

• Icon Facebook
• Icon Twitter
• Icon Linkedin

Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Check our other articles

The 10 Best Fractional CMO Companies in 2024

2024 Marketing Trends: Predictions, Strategies, & A Glimpse at What’s Next

The Step-by-Step Guide to Product-Market Fit for Startups

Keep up with the latest and greatest in growth marketing 📖

• Email This field is for validation purposes and should be left unchanged.

• Español – América Latina
• Português – Brasil

Spotify: The future of audio. Putting data to work, one listener at a time.

About Spotify

A Google Cloud customer since 2016, Spotify is the most popular global audio streaming subscription service with 248m users, including 113m subscribers, across 79 markets. Spotify is the largest driver of revenue to the music business today.

Spotify exemplifies the new era of scaling a business. It launched a music-streaming service in late 2008, surpassed 1 million customers in early 2011, and today offers 248 million monthly active users in 79 markets access to more than 50 million songs and podcasts.

That’s technology-driven hypergrowth by anyone’s standard. Equally striking, though, is the way Spotify has continued to innovate its offering, while adhering to the enduring principles for growing and sustaining a successful business: Pay attention to the customer. Find new ways to delight them. Use your comparative advantage, doubling down on the things you are best at, and find good partners to handle other work. Focus on scaling your culture even as you scale your technology.

Those old truths may be even more urgent in the digital age. Streaming audio is a competitive business, requiring fast product development, customer understanding, and powerful tools for things like recommendation, music discovery, and connecting people. Besides helping people find new music and podcasts, Spotify helps artists connect with fans and collaborate with each other.

Google Cloud is proud to support Spotify’s increasing diversification and success. In 2016 we worked together to move 1200 online services and data processing DAGs (directed acyclic graphs) as well as 20,000 daily job executions, affecting more than 100 Spotify teams, from Spotify’s data centers to the cloud. Today, Spotify’s customers listen to billions of daily plays of music and podcasts leveraging Google Cloud’s global network.

By employing automated, developer-friendly services on Google Cloud, Spotify’s teams could focus better on its core business, while gaining access to services, like data analytics, on which it could grow.

“Google Cloud removes a lot of the operational complexity from our ecosystem. That frees up time,” said Tyson Singer, vice president of technology and platform at Spotify. “We can iterate quicker on key needs, like data insights and machine learning. Having infrastructure managed for us, with the lower-value details taken away, streamlines our ability to concentrate on what’s important to our users and give them the experiences they know and love about Spotify.”

Spotify, not surprisingly, has a very engineering-driven culture, with almost half of its staff focused on building, launching, and maintaining its products. With major research and development offices in Boston, Gothenburg, London, New York, and Stockholm, the size of its workforce matches the global scale of its business. That requires a culture of collaboration and swift execution. In the fourth quarter of 2019, Spotify reported 271 million monthly users and 124 million Premium subscribers, a record, continuing its history of global growth.

Effective data use that preserves customer privacy even as the services scale is another core part of the process. Some of that increase is from a growing user base, but even more is from effective understanding of the customer experience on Spotify. The engineering brilliance that matches data-driven insights with improved customer experiences is increasingly easier and faster on the cloud.

Robust building blocks that exist on top of core data storage, computing, and network services help take away much of the backend hassle on the way to new product creation. Spotify’s technology leaders point to the particular importance of BigQuery, the Google Cloud data analysis tool, as well as Pub/Sub, for faster software application development. Dataflow, for real-time and historical data analysis, has also been particularly useful.

Much of that data goes towards solving the tricky issue of personalization in new ways. Data privacy is at the core of Spotify’s development activities as it seeks to offer music lovers new ways to find the sounds they love and connect with artists. Podcasting, a recent groundbreaking effort, relies even more on robust discovery to discern things like topics, creators, and user interest levels.

For artists, the ability to find and connect with fans, or work on new material with other musicians, is another dimension of data-driven discovery. Artists on Spotify have access to dashboards that let them gain knowledge about their fans and other artists, which helps them make better-informed decisions about everything from where to plan their upcoming tour to when to drop their next release.

Ultimately, it is great user experiences that powers a business. In the past year alone, the number of Spotify’s premium subscribers has grown by 29 percent . The company credits growth in new markets, as well as innovative new products, for the increase.

Underlying Spotify's growth is its commitment to experimentation and innovation. Being able to go faster and to more efficiently test a wide spectrum of new features and ideas means Spotify will be able to focus its DNA of creativity and excellence on even more innovative experiences for its happy listeners.

Tell us your challenge. We're here to help.

• Reach out to our team to see how Google Cloud can help your business.

Spotify Marketing Strategy: How Spotify won the market by vouching for 'music for everyone'

Learn about spotify's iconic marketing strategy and advertising campaigns. read how spotify aces the 4ps of marketing mix - product, price, promotion & placement..

• overview#goto" data-overview-topic-param="history">Spotify's History
• overview#goto" data-overview-topic-param="popular">How Spotify became popular?
• overview#goto" data-overview-topic-param="pricing">Spotify's Pricing Strategy
• overview#goto" data-overview-topic-param="business">Spotify's Business Model
• overview#goto" data-overview-topic-param="strategy">Spotify's Marketing Strategy
• overview#goto" data-overview-topic-param="iconic">Iconic Marketing Campaigns
• overview#goto" data-overview-topic-param="outperform">How did Spotify outperform?
• overview#goto" data-overview-topic-param="key">Key Takeaways

'Mood toh tabhi banega, jab Spotify chalega' literally translates to "the mood will be set when you start using Spotify!" Hasn't Spotify proved this through its music recommendations based on your listening history?

Spotify is a popular music streaming platform founded in 2006. Spotify is known for its use of algorithms to create personalized playlists for each and every user.

With a vast library of songs, podcasts, and other audio content, Spotify has become a go-to destination for music lovers around the world. Let's dive into how the Spotify marketing strategy helped it make it to the top.

A brief history of Spotify

Spotify is a digital music service with access to millions of songs. It was founded by two Swedish entrepreneurs, Daniel Ek and Martin Lorentzon. At the time, Ek was working as a software developer and Lorentzon was an experienced businessman.

The idea for Spotify came about when Ek realized that despite the existing music piracy practices, many people were still turning to illegal sources to do them. Immediately, he saw an opportunity to create a legitimate service without having to download pirated music files. Spotify's focus was also to offer the convenience that one would get through music piracy, but without the risk of virus and other issues.

Both its founders began developing the service in 2005 and launched it in Sweden in October 2008. They quickly gained a large following, and by the end of the year, they had over a million users. In 2011, Spotify expanded to the United States, and it has since become one of the most popular music streaming services in the world.

Today, it has over 345 million users in more than 100 countries.

What does Spotify believe in?

Spotify's mission is to "unlock the potential of human creativity."

Through its mission, Spotify encourages artists to be creative and innovative, alongside nurturing their opportunity to live off their art and passion.

Source: NME

Spotify believes that music is a universal language that can bring people together and that it is responsible for using its platform to provide access to music for as many people as possible. This is outrightly spoken of in their vision “to be the world’s go-to music service, available anytime, anywhere."

Finally, Spotify also strongly emphasizes transparency and buildds trust with its users.

How Spotify became a popular music streaming platform

Having launched in 2008, Spotify gained popularity in the European market initially before it expanded to the United States in 2011. One of the key factors in Spotify's early success was its focus on building partnerships with record labels and artists, which helped build a strong music library from the very beginning. The company's other smart move was to make it super easy for its users to discover new music through its algorithm.

In addition to setting up a strong music library and providing personalized playlists, Spotify also paid attention to building a user-friendly and providing a seamless listening experience across multiple devices.

The company has also made efforts to differentiate itself from its competitors by offering a freemium model with ad-supported listening and by offering exclusive content to its premium subscribers.

These factors have contributed to Spotify's success and positioning itself as a leading music streaming platform in the industry.

But what about Spotify's pricing strategy for profits?

Spotify offers a variety of subscription options for its music streaming service. The company has a free, ad-supported version of its service as well as several premium subscription options. The premium subscriptions offer ad-free listening, higher-quality audio, offline listening, and the ability to skip as many tracks as you like for a fee.

Source: Gadgets 360

It offers discounted rates for students and family plans and has also introduced a discounted plan for Spotify users in developing countries.

In addition to these individual and family subscriptions, Spotify also offers a Duo subscription. This subscription is designed for two people living in the same household.

So, what makes Spotify's business model and marketing strategies successful?

Spotify's business model is based on offering a music streaming service that is available on a variety of devices, including computers, smartphones, and tablets. Spotify's revenue stream is broadly through two means: a free, ad-supported service and a subscription-based service.

The company has made a number of partnerships and acquisitions that have helped it to expand its reach and improve its service. For example, Spotify has struck deals with major music labels and rights holders, which has helped it to secure a large and diverse music library.

Source: Smart Insights

Spotify has also made a number of strategic acquisitions, including buying Gimlet Media and Anchor FM, which have helped it to expand into the podcasting space and become the podcast streaming market. This has allowed the company to diversify its content offerings and reach a wider target audience.

In terms of its marketing strategy, Spotify has used various tactics to set up its brand identity and attract new users. This has included digital marketing efforts including targeted advertising, social media trends, campaigns, and partnerships with artists and music festivals.

What is Spotify's marketing strategy?

Spotify focused on providing a high-quality service to its users, which has helped to drive word-of-mouth as a marketing strategy and create a loyal user base.

Beginning from one-to-one emails to catching the social media trends to other strategic partnerships, Spotify has nailed it all. There's no doubt that Spotify has knocked out the other market players and has a massive success story - but what exactly is the reason behind its successful marketing strategy? Let's take a look at the Spotify marketing mix:

Spotify's Promotion

One key element of Spotify's promotion strategy is its partnerships with music festivals, concert tours, and other live events. By aligning itself with popular music events, Spotify is able to reach a large and engaged target audience.

Another important aspect of Spotify's promotion strategy is its use of social media platforms, such as Facebook, Instagram, and Twitter, to connect with users and promote new features and content. The company also uses email as a personalized marketing tool to reach out to users and promote new releases and playlists.

Spotify also relies on word-of-mouth as a marketing strategy and encourages its users to share their favorite songs and playlists with their friends and followers on social media. This helps to expand the reach of the service and introduce it to new users.

In addition to these efforts, Spotify also invests in traditional advertising channels, such as TV, radio, and print, to establish its brand identity and reach new audiences.

Spotify's Product

Spotify’s product strategy is simply centered on providing users with a seamless listening experience, irrespective of the devices on which they are listening in.

The company has strived to make its user experience and interface easy to navigate and intuitive, with features like personalized playlists, recommendations based on listening history, and the ability to share music with friends.

Another critical aspect of Spotify's product strategy is its emphasis on partnerships and integrations. The company has formed partnerships with a number of music labels, paying artists, music festivals, as well as other companies in the tech industry. This has helped Spotify to expand its reach and offer its users a wider variety of content.

Finally, Spotify has also focused on leveraging data and machine learning to improve its product offerings. For example, its usage of data to personalize recommendations and to help artists understand the Spotify listeners better.

Overall, Spotify's product strategy is geared towards providing users with an unparalleled music listening experience for any music lover. Thereby, it helped in building a strong community of music fans.

Spotify's Pricing Strategy

Spotify's pricing strategy has evolved over time. Currently, the company offers three main types of subscriptions:

Spotify Free: This is an ad-supported, freemium model of the service. Users can access a limited selection of songs and playlists, but they cannot choose specific songs or albums to play on demand. They will not be able to download music as well.

Spotify Premium: This is a paid subscription that costs $9.99 per month. With Premium, users can access the full range of songs and playlists on demand, without any ads, and even download music.

Spotify Family: This is a version of Premium that allows up to six family members to share one subscription for a discounted price of $14.99 per month.

Spotify's Placement

Spotify has a worldwide presence making it available all around the world through mobile apps, web players, PC/Mac desktop applications & other supported devices.

One can install and make use of the app through Google Play Store, App Store, or even the Spotify web player just with the help of an internet connection and a web browser.

Spotify's Iconic Marketing Campaigns

From the very start, Spotify penetrated the market of Millennials and Gen Z and deep-routed the impression of ‘music for everyone.’

Let's explore some of Spotify's most creative marketing tactics that helped it make music as the universal language -

Thanks, 2016. It's Been Weird.

In December 2016, Spotify launched a campaign and featured a series of humorous ads that reflected the strange events of the year. The ads featured celebrities such as John Legend and J.K. Simmons and were widely shared on social media.

Source: Veto

Sounds of Summer

This campaign, which ran in the summer of 2018, featured a series of TV ads and social media posts that highlighted the most popular songs on Spotify during the summer months. The ads featured a mix of up-and-coming artists and established acts, and were designed to get people in the mood for summer.

Source: Newsroom

Your Daily Drive

This campaign, which launched in 2019, focused on Spotify's "Daily Drive" playlist, which is designed to help people stay focused and motivated while driving. The ads featured real people sharing their stories about how the playlist has helped them stay focused and motivated on the road.

Source: PR Newsroom

I'm with the banned

Spotify always promoted creativity and the free flow of thoughts and it didn’t shy away when it came to marketing campaigns.

In response to the travel ban implemented by the Trump administration in 2017, Spotify launched a campaign called "I'm With the Banned" to show support for affected artists. The campaign included a playlist of music from artists who were affected by the ban, as well as a series of social media posts and a statement from Spotify CEO Daniel Ek condemning the ban.

Source: The Daily Caller

Behind the Lyrics

In 2016, Spotify launched this campaign to provide users with additional information and context about the lyrics of their favorite songs. The ‘Behind the Lyrics’ feature was a popular addition to the app. This campaign positioned Spotify as the destination for music lovers who wanted to learn the meanings behind their favorite songs.

How did Spotify outperform Apple music, YouTube music, and Amazon music?

Spotify has emerged as a dominant player in the music streaming industry, and there are a few reasons why the company has been able to outperform competitors like Apple Music, Amazon Music, and YouTube Music.

Source: Smartprix

One reason is that Spotify was one of the first companies to enter the music streaming market, and as a result, it has been able to build up a large user base over the years. This has given the company a strong foundation to continue growing and attracting new users.

Another reason is that Spotify has made a concerted effort to build partnerships and relationships with music labels, artists, and other industry stakeholders. This has allowed the company to secure exclusive rights to certain songs and albums, thereby helping it to differentiate its service from competitors in the music industry.

How Spotify's marketing strategy makes you listen to more music?

Spotify's marketing strategies are designed to attract and retain users by promoting the benefits of its music streaming service. Some of the ways how Spotify marketing strategy encouraged users to listen to more music include:

Personalized recommendations: The Spotify marketing strategy uses algorithms to suggest music to users based on their listening history and preferences. These recommendations can help users discover new artists and songs that they might not have found otherwise, in turn encouraging them to listen to more music.

Mood-based playlists:  Spotify offers a wide range of curated playlists that are designed to fit different moods and situations. These playlists can help users discover new music that they might enjoy, and they make it easy to listen to music without having to spend time searching for specific songs or artists.

Music discovery features:  Spotify provides features such as "Discover Weekly" and "Daily Mix," which are designed to help users discover new music based on their listening history. These features can help users find new music that they might enjoy, which can encourage them to listen to more music.

Source: Atlas VPN

Key Takeaways from Spotify for Entrepreneurs

For an aspiring entrepreneur who is all set to outshine in the music industry despite the giant names, here are some major takeaways from Spotify's marketing strategy and its business-

Having a clear vision and staying true to it:  As an entrepreneur or a business leader, it is always important to have a clear vision and stay true to it by all means. Spotify absolutely made sure to provide an outstanding music experience to its users.

Continuously learn and adapt:  In the rapidly changing business environment, it is vital for an entrepreneur to be willing to expand beyond one's horizon and adapt to the changing trends.

Creativity and innovation in driving business growth:  Spotify was one of the first companies to popularize the music streaming model, which revolutionized the way people consume music and other forms of audio content. You should always be on the lookout for ways to innovate your business.

Maintaining relationships with customers:  By consistently delivering high-quality products and services, Spotify has likely been able to build trust and satisfaction among its customers. Make sure to record your customers' feedback periodically use it to continuously improve the quality of your products and services.

• popover#mouseOver mouseout->popover#mouseOut" data-popover-translate-x="-25%" , data-popover-translate-y="-220%"> Copy link
• bottom-bar#toggleTagsSection"> popover#mouseOver mouseout->popover#mouseOut" data-popover-translate-x="-25%" , data-popover-translate-y="-220%"> Copy Link
• bottom-bar#toggleTagsSection">

"Must read for every entrepreneur"

"The best part is it's written by real entrepreneurs"

"My favorite newsletter on the web"

You'll love these articles too!

Co-founder & CEO at Flexiple ($3mn+ revenue, bootstrapped) & buildd.co | Helping Startup...

Customer Experience Analytics (CX Analytics) - a Detailed Guide

If you are wondering what customer experience analytics is and how can one quantify customer experience to devise strategies, then keep reading this article.

Co-founder at Flexiple, buildd & Remote Tools ($3 million revenue, bootstrapped)

How to use a Brand Platform for building your brand identity?

Understand why to build a brand platform for your business and how you can execute the necessary brand platform strategies using the brand identity.

Logo Designs Hub: Your digital journey begins here in the USA and Germany. We specialize in...

Digital Folks is an award-winning website designing and Lead generation company in Canada. Our...

There's an air of mystery about 😮. They haven't filled their profile yet.

There's an air of mystery about Vinit 😮. They haven't filled their profile yet.

How to Find Marginal Utility - A Detailed Guide

In this article, you’ll learn how to find marginal utility with the help of a few simple examples!

Community at Buildd

enterprises

World Conference on Information Systems and Technologies

WorldCIST 2021: Trends and Applications in Information Systems and Technologies pp 337–352 Cite as

Keeping the Beat on: A Case Study of Spotify

• Inês Gomes 19 ,
• Inês Pereira 19 ,
• Inês Soares 19 ,
• Mariana Antunes 19 &
• Manuel Au-Yong-Oliveira 20  
• Conference paper
• First Online: 29 March 2021

3588 Accesses

3 Citations

Part of the book series: Advances in Intelligent Systems and Computing ((AISC,volume 1366))

The music industry has faced a tremendous change ever since the emergence of streaming. People now had access to unlimited music to listen to and share with others, which is a great concept. As companies started to invest in the future of streaming, many platforms were created, one of them being Spotify. Standing amidst a crowd of competitors, Spotify managed to climb to the top and comfortably remain there over the years (listed on the NYSE and having 120 employees; IPO share price (3 rd April 2018) = 169.9 US Dollars and share price of 319.77 US dollars on 4 th December 2020). However, it was not easy. Being one of the top streaming platforms in the industry requires effort, investment, adaptation and innovation, and exceptional management. This study analyses in-depth the aforementioned aspects, as well as the company’s business models and its revenue, which combined, led Spotify to where it is today. A survey with 498 answers was performed regarding Spotify, and the results were analyzed by using descriptive and inferential (Chi-Square test) statistics. We thus conclude very confidently that there does seem to be an association (statistically significant at the 0.1% level) between age and the use of Spotify. Younger respondents (18–35 years) are more likely to use Spotify than older respondents (> 35 years). Overall, Spotify’s business model is one of the best in its field and is constantly evolving, which is what is to be expected of a company that seeks the top spot on the podium.

This is a preview of subscription content, log in via an institution .

Buying options

• Available as PDF
• Read on any device
• Instant download
• Own it forever
• Available as EPUB and PDF
• Compact, lightweight edition
• Dispatched in 3 to 5 business days
• Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Kaimann, D., Tanneberg, I., Cox, J.: “I will survive”: online streaming and the chart survival of music tracks. Managerial and Decision Economics, pp. 1–18 (2020)

Google Scholar  

IFPI: Global Music Report (2019). https://www.ifpi.org/ifpi-global-music-report-2019/ . Accessed 28 Oct 2020

Fly, B.: How does music consumption impact the music industry and benefit artists? Accounting Undergraduate Honors Theses 20 (2016)

Carroni, E., Paolini, D.: Business models for streaming platforms: content acquisition, advertising, and users. Inf. Econ. Policy 52 , 1–13 (2020)

Article   Google Scholar  

Lee, M., Choi, H.S., Cho, D., Lee, H.: Can digital consumption boost physical consumption? The effect of online music streaming on record sales. Decis. Support Syst. 135 (6), (2020)

Magaudda, P.: When materiality “bites back”: digital music consumption practices in the age of dematerialization. J. Consum. Cult. 11 (1), 15–36 (2011)

Wikström, P.: The Music Industry in an Age of Digital Distribution. OpenMind. https://www.bbvaopenmind.com/en/articles/the-music-industry-in-an-age-of-digital-distribution/ . Accessed 11 May 2020

Murphy, S.: Here’s how music consumption has changed over the last decade. The Music Network. https://themusicnetwork.com/music-consumption-decade/ . Accessed 02 Nov 2020

Kingsnorth, S.: Digital Marketing Strategy: An Integrated Approach to Online Marketing. Kogan Page, London (2016)

Khong, T.: Customer perceived value freemium business model: Case study: Spotify in Finnish and Vietnamese markets (Master’s Thesis in Economics and Business Administration Master’s, University of VAASA) (2019)

Kim, J., Nam, C., Ryu, M.H.: What do consumers prefer for music streaming services?: A comparative study between Korea and the US. Telecommun. Policy 41 (4), 263–272 (2017)

Aguiar, L.: Let the music play? Free streaming and its effects on digital music consumption. Inf. Econ. Policy 41 , 1–14 (2017)

Pelusi, M.: Napster Is Released. Salem Press Encyclopedia. http://widgets.ebscohost.com/prod/customerspecific/ns000290/authentication/index.php?url=https%3a%2f%2fsearch.ebscohost.com%2flogin.aspx%3fdirect%3dtrue%26AuthType%3dip%2cshib%2cuid%26db%3ders%26AN%3d89315521%26lang%3dpt-pt%26site%3deds-live%26scope%3dsite . Accessed 30 Oct 2020

Aversa, P., Hervas-Drane, A., Evenou, M.: Business model responses to digital piracy. Calif. Manag. Rev. 61 (2), 30–58 (2019)

Zennyo, Y.: Freemium competition among ad-sponsored platforms. Inf. Econ. Policy 50 , (2020)

Farmbrough, H.: How This Swedish Venture Capitalist Became Spotify’s Lead Investor. https://www.forbes.com/sites/heatherfarmbrough/2018/03/27/how-this-swedish-venture-capitalist-became-spotifys-lead-investor/?sh=4bfd2e469075 . Accessed 04 Nov 2020

Stassen, M.: New Spotify Patent Sheds More Light On Potential Karaoke Mode – Including Auto-Tuned Vocals - Music Business Worldwide. Music Business Worldwide. https://www.musicbusinessworldwide.com/new-spotify-patent-sheds-more-light-on-potential-karaoke-mode-including-auto-tuned-vocals/ . Accessed 04 Nov 2020

Spotify AB, Stockholm (SE): Methods and Systems for Overlaying and Playback of Audio Data Received from Distinct Sources. U.S. Patent 10,771,521 B2 (2020)

Spotify AB, Stockholm (SE): Methods and Systems for Personalizing User Experience Based on Personality Traits. U.S. Patent 10, 798,214 B2 (2020)

Stassen, M.: Spotify Has A Patent For Personality Tracking Technology –And It’s Pretty Creepy Stuff - Music Business Worldwide. Music Business Worldwide. https://www.musicbusinessworldwide.com/spotify-has-a-patent-for-personality-tracking-technology-and-its-pretty-creepy/ . Accessed 10 Nov 2020

Cuofano, G.: How does Spotify make money? Spotify Freemium Business Model in a Nutshell. https://fourweekmba.com/spotify-business-model/ . Accessed 04 Nov 2020

Spotify. Audio-First - Spotify. https://newsroom.spotify.com/2019-02-06/audio-first/ . Accessed 11 Nov 2020

Perez, S.: Techcrunch is now a part of verizon media. https://techcrunch.com/2020/07/21/spotify-launches-video-podcasts-worldwide-starting-with-select-creators/?guccounter=1 . Accessed 11 Nov 2020

Carman, A.: Spotify is testing video podcasts with two youtube stars. https://www.theverge.com/2020/5/6/21249389/spotify-video-podcast-test-upload-content-test-youtube . Accessed 11 Nov 2020

Spotify. Spotify’S Biggest Playlist, Today’S Top Hits, Celebrates 25 Million Followers — Spotify. https://newsroom.spotify.com/2019-12-16/spotifys-biggest-playlist-todays-top-hits-celebrates-25-million-followers/ . Accessed 04 Nov 2020

Google Cloud. Spotify Case Study| Google Cloud. https://cloud.google.com/customers/spotify . Accessed 04 Nov 2020

Desai, M.: How Spotify makes Money - Business Model. https://medium.com/dissecting-music-tech/how-spotify-makes-money-business-model-ca0a71a19163 . Accessed 10 Nov 2020

Spotify. Listening Is Everything. https://www.spotify.com/pt/premium/?checkout=false#PLANS . Accessed 10 Nov 2020

Ads.spotify.com. Soluções De Publicidade| Spotify Advertising. https://ads.spotify.com/pt-BR/experiencias-publicitarias/ . Accessed 10 Nov 2020

Kakar, K.: How Spotify Works: Business Model and Revenue Streams. https://insights.daffodilsw.com/blog/how-spotify-works-business-model-and-revenue-streams . Accessed 10 Nov 2020

Seitz, P.: https://www.investors.com/news/technology/spot-stock-buy-now/ . Accessed 14 Nov 2020

Richter, F.: Infographic: Will Music Streaming Ever Be Profitable? Statista Infographics. https://www.statista.com/chart/577/revenue-and-net-loss-of-pandora-and-spotify/ . Accessed 10 Nov 2020

Business Wire. Spotify Technology S.A. Announces Financial Results for Fourth Quarter of (2018). https://www.businesswire.com/news/home/20190206005298/en/Spotify-Technology-S.A.-Announces-Financial-Results-Fourth . Accessed 10 Nov 2020

Oakshott, L.: Essential Quantitative Methods - for Business, Management, and Finance. 6th edn. Macmillan International Higher Education, London (2016)

Saunders, M.N.K., Cooper, S.A.: Understanding Business Statistics – An Active-Learning Approach. The Guernsey Press, Guernsey (1993)

Bryman, A., Bell, E.: Business Research Methods, 4th edn. Oxford University Press, Oxford (2015)

Statista – Share of Spotify users in the United States as of March 2018, by age. https://www.statista.com/statistics/475821/spotify-users-age-usa/ . Accessed 06 Dec 2020

PORDATA – National minimum wage – monthly figure (PPS). https://www.pordata.pt/en/DB/Europe/Search+Environment/Table . Accessed 28 Dec 2020

Download references

Author information

Authors and affiliations.

Department of Languages and Cultures, University of Aveiro, 3810-193, Aveiro, Portugal

Inês Gomes, Inês Pereira, Inês Soares & Mariana Antunes

INESC TEC, GOVCOPP, Department of Economics, Management, Industrial Engineering and Tourism, University of Aveiro, 3810-193, Aveiro, Portugal

Manuel Au-Yong-Oliveira

You can also search for this author in PubMed   Google Scholar

Corresponding author

Correspondence to Manuel Au-Yong-Oliveira .

Editor information

Editors and affiliations.

ISEG, University of Lisbon, Lisbon, Portugal

Álvaro Rocha

College of Engineering, The Ohio State University, Columbus, OH, USA

Hojjat Adeli

Institute of Data Science and Digital Technologies, Vilnius University, Vilnius, Lithuania

Gintautas Dzemyda

DCT, Universidade Portucalense, Porto, Portugal

Fernando Moreira

Department of Information Sciences, University of Sheffield, Lisbon, Portugal

Ana Maria Ramalho Correia

Rights and permissions

Reprints and permissions

Copyright information

© 2021 The Author(s), under exclusive license to Springer Nature Switzerland AG

About this paper

Cite this paper.

Gomes, I., Pereira, I., Soares, I., Antunes, M., Au-Yong-Oliveira, M. (2021). Keeping the Beat on: A Case Study of Spotify. In: Rocha, Á., Adeli, H., Dzemyda, G., Moreira, F., Ramalho Correia, A.M. (eds) Trends and Applications in Information Systems and Technologies . WorldCIST 2021. Advances in Intelligent Systems and Computing, vol 1366. Springer, Cham. https://doi.org/10.1007/978-3-030-72651-5_33

Download citation

DOI : https://doi.org/10.1007/978-3-030-72651-5_33

Published : 29 March 2021

Publisher Name : Springer, Cham

Print ISBN : 978-3-030-72650-8

Online ISBN : 978-3-030-72651-5

eBook Packages : Intelligent Technologies and Robotics Intelligent Technologies and Robotics (R0)

Share this paper

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Publish with us

Policies and ethics

• Find a journal
• Track your research

Table of Contents

Spotify target audience, marketing strategy of spotify, 5 takeaways from spotify marketing strategy, a case study on spotify marketing strategy.

Emerging as a powerful music streaming platform for millennials, Spotify's rise to success has been quite incredible. Currently, it boasts over 299 million subscribers across over 100 markets. Spotify provides music on an international streaming platform where users can listen to their favorite artists and the top musicians can make their playlists, promote their music and connect with their fans better. Founded in 2006, Spotify was curated by Daniel Ek with the simple concept of combating music piracy to help artists get their compensation more ethically. Now, it has almost all top emerging singers and composers as well as local artists on its platform because of its simplicity and marketing strategy . Let's understand Spotify's marketing strategy through this case study. 

Become a Certified Marketing Expert in 8 Months

Spotify's target audience is millennials, with its primary market set in the USA. Along with this, Spotify has been known to target students and business professionals as a platform because of their time spent listening to music online. Here is a table classifying Spotify target audience in different sections:

Let’s take a look at some of the critical features of Spotify marketing strategy that helped the platform reach the top:

Freemium Model is the USP of Spotify

The key feature of this platform is that it’s free for users only, with some ads playing between the music. It has been found that this freemium model approach has worked amazingly for Spotify because users can take benefit of free music without paying for a subscription. Spotify also made the most of this feature to promote ads in between to keep coercing the users consciously or subconsciously to sign up for premium to listen to music without any ad breaks. This unique marketing hack helped it boost its subscriber base around the world. 

A Minimalistic App Interface

Another critical aspect of Spotify’s marketing strategy is that its user interface in the app, as well as chrome, is entirely minimalistic, easy to understand and classy. This makes it a top choice for music fans as well as performers. 

Connecting With Artists for Collaborations

Spotify has close ties with the top artists of almost every mainstream industry. This provides users with a way to connect to their top artists, which leads to open live nights, another lovely way to attract more subscribers taking benefit of exclusive content!

Emotional Ads for Promotion

Even in India, Spotify ads often focus on a family, adding a punch of fun and emotional intensity. So, either you will find ads during Christmas, Diwali, etc. These cultural ads can popularize the brand better through a long-lasting impact.

Personalized at its Core

Spotify’s AI interface has been conceptualized to personalize as per its users. Now, whether it’s a millennial using Spotify for podcasts or music or Gen X searching trending Instagram music. Spotify is ready to personalize all their preferences.

Here are the top takeaways from Spotify Marketing Strategy:

• The Freemium model works incredibly for users as well as the platform. This is because the users are getting free music while listening to ads, which seems like a perfect two-way venture for a business.
• Putting emotions in its ads can also better transform your connection with the target audience and boost your reach internationally and locally.
• Strategic partnerships with artists, their labels, trending musicians, and podcasters is another way to keep things refreshed. 
• A more straightforward and smooth AI interface makes the experience more personalized and highly user-centric. 

Thus, we hope this blog provides you with all the details of Spotify marketing strategy. Curious about digital marketing and want to make a career in it? Then, Simplilearn has the perfect course for you to learn from the world’s top marketing professionals. Sign-up for our Digital Marketing Specialist training program .

Our Digital Marketing Courses Duration And Fees

Digital Marketing Courses typically range from a few weeks to several months, with fees varying based on program and institution.

Recommended Reads

Digital Marketing Career Guide: A Playbook to Becoming a Digital Marketing Specialist

Walmart Marketing Strategy

The Best Spotify Data Analysis Project You Need to Know

Introductory Digital Marketing Guide

A Case Study on Netflix Marketing Strategy

12 Powerful Instagram Marketing Strategies To Follow in 2021

Get Affiliated Certifications with Live Class programs

Post graduate program in digital marketing.

• Joint Purdue-Simplilearn Digital Marketer Certificate
• Become eligible to be part of the Purdue University Alumni Association
• PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP, SP, and OPM3 are registered marks of the Project Management Institute, Inc.

DigitalProductAnalytics.com

Case Study: Spotify

Introduction

In the realm of digital music streaming, Spotify stands as a global phenomenon that has redefined how we consume and experience music. Behind its user-friendly interface and extensive music library lies a strategic application of product analytics that has propelled Spotify to the forefront of the industry. This blog post delves into the captivating case study of Spotify’s use of product analytics, shedding light on how this data-driven approach has been instrumental in shaping the platform’s success.

The Essence of Product Analytics

Understanding User Behavior

At the core of Spotify’s triumphant journey is its adept utilization of product analytics, allowing the platform to gain unparalleled insights into user behavior. By meticulously analyzing user interactions—such as playlist creations, song skips, and repeated plays—Spotify crafts a detailed understanding of its users’ musical preferences. This invaluable information forms the foundation for the platform’s “Discover Weekly” and “Daily Mix” features, which curate personalized playlists based on individual tastes. Through these features, product analytics doesn’t merely shape the user experience; it enhances it, delivering music that resonates with users on a profound level.

Enhancing Content Curation

Spotify’s prowess in content curation is undeniably linked to its robust product analytics strategy . The platform employs machine learning algorithms to scrutinize vast amounts of user data, allowing it to identify musical patterns and trends. This data-driven approach empowers Spotify to recommend songs, artists, and genres that users might enjoy, transcending the role of a mere streaming service. The product analytics-driven content curation model is a testament to how technology can personalize entertainment experiences and keep users engaged for longer periods.

Optimizing User Engagement

Personalized Playlists and Recommendations

Spotify’s innovative use of product analytics doesn’t stop at content curation; it extends to user engagement optimization. The platform’s “Wrapped” feature, which compiles a personalized year-in-review summary for each user, demonstrates this beautifully. By analyzing individual listening habits, Spotify creates visualizations that encapsulate a user’s year of musical exploration. This showcase of personalized data fosters a sense of connection between the user and the platform, nurturing long-term engagement.

A/B Testing for User Experience

Product analytics also plays a pivotal role in Spotify’s continuous efforts to refine its user interface. The platform frequently conducts A/B testing—a process where two versions of a feature or interface are presented to different user groups—to gather insights on user preferences and behaviors. By monitoring which version garners more engagement or leads to higher conversion rates, Spotify’s development team can make informed decisions about which design elements resonate best with their audience. This iterative approach, guided by product analytics, ensures that every change made aligns with user expectations.

Innovating Business Strategies

Data-Driven Partnerships

Beyond enhancing the user experience, Spotify’s product analytics proficiency has also transformed its business strategies. Through an analysis of user listening habits, Spotify has identified potential partnership opportunities with record labels and artists. This data-driven approach enables the platform to target specific demographics and tailor its partnerships accordingly. For instance, if product analytics reveal that a significant number of users enjoy a particular genre, Spotify can collaborate with artists from that genre to offer exclusive content, enhancing its value proposition.

Dynamic Pricing and Subscription Models

Spotify’s case study on product analytics showcases the role it plays in the evolution of pricing models. By scrutinizing user preferences, listening frequency, and willingness to engage with ads, Spotify can optimize its pricing tiers. This allows the platform to offer different subscription levels, from ad-supported free plans to premium packages. Through this model, Spotify can cater to a diverse user base, ensuring that the product analytics-driven pricing strategy appeals to various segments of the market.

Spotify’s journey from a fledgling startup to a global music streaming powerhouse is underscored by its masterful application of product analytics. By understanding user behavior, enhancing content curation, optimizing user engagement, and innovating business strategies, Spotify has created a symbiotic relationship between data insights and music enjoyment. The case study of Spotify’s use of product analytics serves as a compelling example of how data-driven decisions can elevate a platform, enhance user experiences, and drive business success. As the music streaming landscape continues to evolve, Spotify’s commitment to product analytics is certain to keep it in tune with its users’ preferences and at the forefront of innovation.

Related News

Case Studies of Companies Leveraging the Object-Action Framework for Product Enhancement

Product Analytics and AI: A Compilation of Case Studies

Data for Success: 10 Inspiring Product Analytics Case Studies

Case Study: Airbnb

• Harvard Business School →
• Faculty & Research →
• HBS Case Collection
• Format: Print
• | Language: English
• | Pages: 19

About The Author

Anita Elberse

Related work.

• Faculty Research
• Spotify  By: Anita Elberse

Spotify Branding Strategy and Marketing Case Study

Analysis and examples of spotify’s identity, positioning, key messages, tone of voice, brand archetypes, customer benefits, competitors, and marketing content..

Back To The Branding Strategies Homepage

Brand Overview

• Entertainment & Media

Business Type

Software Service

https://www.spotify.com

Target Customer

Music & Audio Content Fan

Primary Need ( Job To Be Done )

Access all my favorite music and audio content no matter what device I’m using

Brand Visual Identity & Content

Primary brand colors, brand typefaces.

• Spotify Circular

Hero Content

Hero Content Type

Illustration

Content Features People

Brand messaging, key messages, benefit or feature focus, tone of voice, brand archetypes.

( Learn More About Brand Archetypes )

Everyperson

Brand Positioning ( Elements of Value )

( Learn More About The Elements of Value )

Aspirational

Affiliation & Belonging

Fun & Entertainment

Brand Benefits

Immediate access to all the music and audio content I enjoy in one location

Easy way to share music with others to build personal connections and feel a sense of belonging

Source for discovering new music and audio content to expand my interests and enjoyment

Competition

Key competitors.

Apple Music , YouTube , Amazon Music, Tidal, Pandora, Deezer

Get Help Growing Your Brand

Get a 10 page workbook on Purpose, Vision, and Values. Plus resources for Archetypes, Tone, Messaging, and more.

Check your email to confirm your address and receive your workbook!

• Contributors

Spotify Case Study: Structuring and Executing a Direct Listing

Marc D. Jaffe and Greg Rodgers are partners at Latham & Watkins LLP and Horacio Gutierrez is General Counsel at Spotify Technology S.A. This post is based on a Latham & Watkins client alert by Mr. Jaffe, Mr. Rodgers, Mr. Gutierrez,  Alexander F. Cohen , Benjamin J. Cohen , Paul M. Dudek , and Dana G. Fleischman .

Spo t i f y Technology S.A. went public on April 3, 2018 through a direct listing of its shares on the New York Stock Exchange.

K ey Points:

• A direct listing is an innovative structure that provides companies with an alternative to a traditional IPO in the path to going public.
• Spotify had a number of important goals that it wanted to achieve along with going public, and a direct listing enabled it to do so.

If Spotify’s direct listing were a song, it would surely be at the top of the Today’s Top Hits  [1] playlist for  2018. Since Spotify first announced its intention to become a public company using this groundbreaking and innovative structure, it has generated enormous interest from the financial press and market participants.

Latham represented Spotify in the direct listing, and in this case study Latham lawyers and Spotify’s General Counsel, Horacio Gutierrez, provide a behind-the-scenes look at the transaction, including why Spotify chose to pursue a direct listing, the path to a direct listing, and the challenges encountered along the way.

What Is a Direct Listing?

In a direct listing, a company’s outstanding shares are listed on a stock exchange without either a primary or secondary underwritten offering. Existing shareholders, such as employees and early-stage investors, become free to sell their shares on the stock exchange, but are not obligated to do so. Since there is no underwritten offering, a direct listing does not require the participation of underwriters. This means that certain features that are typical of a traditional IPO—such as lock-up agreements and price stabilization activities—are not present in a direct listing.  [2]

Why a Direct Listing?

When Spotify came to Latham in May of 2017 with its goal of becoming a publicly traded company, it also wanted to achieve a number of other important objectives that did not necessarily align well with a traditional US IPO process. Specifically, Spotify wanted to:

• Offer greater liquidity for its existing shareholders, without raising capital itself and without the restrictions imposed by standard lock-up agreements
• Provide unfettered access to all buyers and sellers of its shares, allowing Spotify’s existing shareholders the ability to sell their shares immediately after listing at market prices
• Conduct its listing process with maximum transparency and enable market-driven price discovery

Having enjoyed great success in the private capital markets, Spotify had no immediate need for funding. So, with a large and diverse shareholder base, a well-known brand, global scale, a relatively easily understood business model, and a transparent company culture, Spotify felt that reimagining the process of going public through a direct listing was the path that best enabled it to achieve these goals.

This post discusses each of these goals in turn.

Offer Liquidity for Shareholders

Shareholders in a private company face a basic limitation—they can’t freely resell their shares on a securities exchange. An IPO solves that problem, but at the cost (among other things) of contractual lock-up agreements. These lock-up agreements, which are commonly required by the underwriters of the IPO, typically restrict additional sales of shares outside of the IPO by certain existing shareholders and the issuer for 180 days post-listing. They are designed to assist in the distribution of the shares being offered by managing potential post-offering supply and resulting volatility in the market. By forgoing the underwritten offering process, Spotify was able to accomplish its goal of providing liquidity without imposing IPO-style lock-up agreements upon listing, and, as a result, the Spotify shareholders were free to sell their shares on the New York Stock Exchange (NYSE) immediately.

Provide Equal Access to All Buyers and Sellers

Spotify wanted to provide all buyers and sellers of its shares with unfettered access to the markets. The traditional IPO process includes a limited set of participants: a company and possibly certain existing shareholders who are offering to resell their shares in the IPO; an underwriting syndicate of investment banks that builds an order book of indications of interest from investors; and the investors who receive the initial allocation of shares being offered in the IPO at the price to the public appearing on the front page of the prospectus. Institutional buyers tend to feature prominently in the initial allocation. In the Spotify direct listing, no fixed number of shares was being sold to the public and no allocations were available at a set public offering price; rather, any prospective purchasers of shares could place orders with their broker of choice, at whatever price they believed was appropriate and that order would be part of the price-setting process on the NYSE. This open access feature and the ability of virtually all existing holders to sell their shares, and of any investor to buy their shares, created a powerful market-driven dynamic for the opening of trading.

Since virtually all of Spotify’s existing shareholders had the opportunity to participate in the first day of trading, shareholders who chose to sell were able to do so at market trading prices rather than only at the initial price to the public that would have been available to them in a traditional IPO. The ability to sell at market prices on the first day of a listing can be a significant benefit to sellers. In 2017, the average first-day return for IPOs was 11.8%, up slightly from 11.4% in 2016, but below the long-term average of 13%.  [3]

As of March 28, 2018, the average first-day return for 2018 IPOs was 13.2%.  [4] On April 3, 2018, when Spotify opened for trading on the NYSE, the NYSE’s initial reference price that was published to the market pre-trading was US$132.00 per share and the opening price of the shares was US$165.90 per share, or approximately 25.7% higher than the NYSE reference price. Trading in Spotify’s shares closed at a price of US$149.01 per share, which was approximately 10.2% below the opening price and 12.9% above the reference price.

Conduct the Process With Maximum Transparency and Enable Market-Driven Price Discovery

Spotify wanted to enable market-driven price discovery by providing increased transparency. To accomplish this, Spotify provided traditional public company-style guidance prior to listing. On March 26, 2018, a week before trading in its shares commenced, Spotify issued guidance to the market consistent in scope of an already public company with its financial outlook for the first quarter and full year 2018.

Spotify also made its investor education process more transparent to the public through its Investor Day. Instead of the usual IPO road show targeted to institutional investors, Spotify hosted an Investor Day presented by its entire leadership team that was publicly streamed live and viewable around the world. [5] With this increased transparency, and without any lock-up agreements, Spotify believed that market-driven supply and demand forces would allow its share price to reach a natural equilibrium. Spotify’s market valuation upon listing on the NYSE was the product of market forces at work—an unlimited number of willing buyers and willing sellers brought together through the facilities of a US stock exchange.

Spotify’s Path to Direct Listing

With a listing ecosystem designed around a traditional underwritten IPO process, Spotify had to work closely with the US Securities and Exchange Commission (SEC) Staff, the NYSE, and its financial and legal advisors to achieve its goals for the direct listing within the confines of the Securities Act, the Exchange Act, NYSE listing rules, and investor expectations. The path to a direct listing involved many features not usually found in the traditional IPO, the most significant of which are highlighted below.

The Registration Statement

As a foreign private issuer,  [6] Spotify used a Form F-1 registration statement to register its shares with the SEC. Because Spotify was not selling any shares and there were no coordinated sales by any existing shareholders, the registration statement took the form of a resale registration statement.  [7] This permitted existing shareholders whose shares were registered on the registration statement to resell their shares as long as the registration statement remained effective and the prospectus was current. While most of the information in the registration statement tracked the information ordinarily included in a registration statement for an IPO, there were important differences, including (1) the shares registered on the registration statement; (2) the “bona fide estimate” of the price range for the cover of the preliminary prospectus; and (3) the plan of distribution section of the prospectus, which delineates how shares may be sold under the registration statement.

Shares Registered; Rule 144 Resales

In an IPO, the registration statement registers the shares to be sold by the company and any selling shareholders, and substantially all other shares would typically be locked up from sale for a period of 180 days. Spotify wanted to ensure that existing shareholders had the option to sell on the NYSE on the first day of trading if they chose to do so. As a result, Spotify needed to either register all shareholders’ shares or ensure that an exemption from registration (such as Rule 144) would allow shareholders to sell without registration. To achieve this, Spotify registered shares held by affiliates and non-affiliates who had not held the shares for at least one year or otherwise did not meet the requirements for selling under Rule 144.  Spotify registered shares held by employees to address any regulatory concerns that resales of shares by employees occurring around the time of the direct listing may not have been entitled to an exemption under the Securities Act. All non-affiliated shareholders who had held their shares for at least one year were free to resell their shares without registration pursuant to Rule 144.  [8]

Spotify disclosed its intention to keep its registration statement effective for a period of 90 days after the effective date. This period was established with an eye towards the availability of the Rule 144 resale safe harbor, under which once an issuer has been subject to the Exchange Act’s reporting requirements for at least 90 days and has timely filed all required reports, an affiliate or non-affiliate that has held shares for at least six months may sell those shares under Rule 144, subject to compliance with the other requirements of the rule. Prior to being subject to those reporting requirements, neither affiliates nor non-affiliates who had held shares for less than a year would have been able to sell shares pursuant to Rule 144.

Price Range

In a traditional IPO, the cover page of the preliminary prospectus contains a price range of the anticipated sale price of the shares. That range, which is required by the SEC’s rules (in particular, Item 501(b)(3) of Regulation S-K), is usually arrived at by the issuer, any selling shareholders, and the underwriters based on the anticipated clearing price for the IPO. Since Spotify was not offering any shares, and since

Spotify’s management would play no role in initial pricing, it was not possible to include this disclosure in the preliminary prospectus. However, Spotify could not conduct investor education without an appropriate preliminary prospectus. The solution was to rely on the instructions to Item 501(b)(3) of Regulation S-K to explain how the price would be determined. The cover page of the preliminary prospectus explained that the opening public price of Spotify’s shares would be determined by buy and sell orders collected by the NYSE from broker-dealers. The NYSE’s designated market maker, in consultation with a financial advisor to Spotify (as discussed further below) and pursuant to applicable NYSE rules, would use those orders to determine an opening price for the shares. Additionally, in line with its goal of conducting the listing process transparently, Spotify disclosed recent high and low sales prices per share in recent private transactions on the cover page of the preliminary prospectus and the final prospectus.

Plan of Distribution

Since there was no underwritten offering, the registration statement did not include an underwriting section. The registration statement instead included a plan of distribution section that is typical of a resale registration statement.  [9] In order to mimic the ordinary trading that would occur in the stock of a publicly listed company, the plan of distribution was limited to brokerage transactions on public exchanges or registered alternative trading venues. Given that there were no underwriters and no organized sales by the existing shareholders, the method of distribution was narrower than many resale registration statements. Nevertheless, the disclosure accomplished Spotify’s goal of providing liquidity to its shareholders without implicating an organized sale process that could be deemed an underwriting.

The plan of distribution section also described in detail the roles of the NYSE’s designated market maker, including the NYSE’s requirement that the designated market maker consult with Spotify’s financial advisor with respect to the establishment by the designated market maker of the opening price. The plan of distribution also clarified that the activities of the designated market maker in opening the shares for trading and facilitating an orderly market for Spotify’s shares would be conducted without coordination with Spotify.

Role of Financial Advisors

In the absence of an underwriting syndicate, Spotify turned to Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, and Allen & Company LLC to serve as its financial advisors. The financial advisors assumed clearly defined roles, which included helping Spotify to define objectives for the listing, advising on the registration statement, and assisting in preparing presentations and other public communications. Morgan Stanley was also appointed by Spotify to serve as the financial advisor for purposes of consultation with the NYSE’s designated market maker as required by the NYSE’s direct listing rules.

The financial advisors did not on behalf of Spotify engage in any book-building activities, participate in investor meetings, conduct price discovery (with the exception of Morgan Stanley’s additional limited role as financial advisor consulting with the designated market maker under NYSE rules), or provide any price support or stabilization activities as they typically would in an IPO.  [10]

In its capacity as financial advisor for purposes of the NYSE’s consultation requirements, Morgan Stanley provided the designated market maker with an understanding of the ownership of Spotify’s outstanding shares and the pre-listing selling and buying interest that it was aware of from potential investors and shareholders.

Investor Education

In a typical IPO, the underwriters take representatives from the company (usually the Chief Executive Officer and Chief Financial Officer) on a one or two-week “road show”, a series of group meetings with buy-side institutional investors, and one-on-one meetings with large institutional investors. Retail investors are offered a video recording of the road show, which is made freely available on the internet.  [11]

These meetings are designed to help the underwriters build an order book of indications of interest from investors, which helps them gauge the level of demand for a stock. With its goal of enhanced transparency in mind, and with no need for book-building, Spotify dispensed with a traditional IPO road show and instead hosted a large-scale Investor Day.

Despite its unique features, Spotify’s Investor Day qualified as a road show under the SEC’s rules. Spotify had chosen to submit its registration statement for confidential review and was therefore required by the SEC to publicly file its registration statement at least 15 days before commencing a road show or, in this case, hosting its Investor Day. The publicly filed registration statement needed to include a “red herring” prospectus meeting the requirements of Section 10(b) of the Securities Act. [12] One of the key features of a red herring prospectus is a “bona fide estimate” of a price range on the cover, which, as noted above, Spotify satisfied by explaining the method by which the price would be determined and providing the high and low sales prices per share of recent private transactions. Finally, as is typical practice in an IPO, the Investor Day materials were consistent with the information contained in the registration statement.

Spotify held its Investor Day on March 15, 2018 after the first public filing of its registration statement on February 28, 2018. The Investor Day lasted just more than two hours, about twice as long as a traditional IPO group meeting, and involved presentations from Spotify’s entire leadership team rather than just the Chief Executive Officer and Chief Financial Officer. The Investor Day was streamed live to anyone with interest and an internet connection. Since the financial advisors did not participate in investor meetings with Spotify, Spotify relied on the strength of its internal investor relations team to lead the investor education effort.

Post-Effectiveness and Pre-Listing Period

The SEC review and comment process was generally in line with that of a traditional IPO. Perhaps not surprisingly in light of the novel characteristics of the listing, roughly a third of the SEC Staff’s comments related to the direct listing structure and the risks related to it, the procedures used in determining the opening trading price on the NYSE, and the roles of the financial advisors and the designated market maker. In its comment letters on the Form F-1, the SEC Staff appeared focused on ensuring that Spotify highlighted the direct listing structure as a novel method for going public and noting that, as a result, the trading volume and share price could be more volatile than in a traditional IPO. On March 23, 2018, the SEC declared Spotify’s registration statement effective after being in registration with the SEC for just more than three months, approximately the same timing as an IPO.

In an IPO, effectiveness would mark the end of the road show process and would mean that the offering was ready to price and begin trading the following morning. Spotify chose a different path, deciding to hold the first day of trading more than a week later, on April 3, 2018. Why such a gap? First, once Spotify was subject to the reporting requirements of the Exchange Act, it wanted to further its goal of transparency by issuing standard public company-style guidance to the market with its financial outlook for the first quarter and full year 2018 and then to allow this information to season with investors before listing and the beginning of trading. Second, in order to achieve its goals of liquidity for existing shareholders and equal access to all buyers and sellers, Spotify wanted to ensure that existing shareholders had sufficient time to deposit their shares through the Depository Trust Company (DTC) into a brokerage account prior to the first day of trading, if they wished to do so. Consequently, existing shareholders would be able to potentially trade the shares starting from the moment of the opening bell. Much of the work required to effect such deposits needed to occur after the effectiveness of the registration statement.

NYSE Rulemaking

The NYSE generally expects to list companies in connection with an IPO with a firm underwriting commitment, upon transfer from another market, or pursuant to a spin-off; in each situation, companies must demonstrate they meet specified public float thresholds. On a case-by-case basis, the NYSE had the ability to list private companies that previously had not been registered with the SEC if the company could demonstrate a US$100 million aggregate market value of publicly held shares based on a combination of both (1) an independent third-party valuation; and (2) the most recent trading price for the issuer’s shares in a trading system for unregistered securities operated by a national securities exchange or a registered broker-dealer, or a so-called private placement market. With respect to this second prong, the NYSE looks for a sustained trading history over several months. Although there was a history of private resales of Spotify shares, the trading activity would not satisfy the NYSE requirements.

As a result, in order to amend its rules to permit the direct listing of a company like Spotify, in March 2017, the NYSE began the formal rule filing process with the SEC. This process was successfully completed in February 2018, when the SEC approved a new NYSE rule that permits issuers to effect a direct listing of their shares upon effectiveness of a resale registration statement under the Securities Act and without a related underwritten IPO. The new rule provides an exception to the private placement market trading requirement for issuers that (1) have a recent valuation from an independent third party indicating at least US$250 million in aggregate market value of publicly held shares; and (2) engage a financial advisor to be consulted by the NYSE’s designated market maker in determining the opening trading price. Because its shares did not trade in a private placement market, and since the aggregate market value of its publicly held shares was higher than US$250 million, Spotify was able to take advantage of the new NYSE rule to effectuate its direct listing.

Regulation M

The non-traditional nature of the Spotify direct listing also engendered a number of conversations with the SEC Staff as to whether or not the registration of shares for resale from time to time by existing shareholders under the Form F-1 registration statement constituted an “offering” and, if so, whether such offering, particularly when viewed together with the company’s investor relations and education activities would constitute a “distribution” for purposes of Regulation M under the Exchange Act.

Regulation M contains a set of prophylactic rules intended to protect the integrity of the securities offering process by preventing persons with a financial interest in a securities offering from taking particular actions that might manipulate the market for the securities being offered.  [13] In a traditional IPO, the application of Regulation M is simply assumed and the requirements, including with respect to the delineation of the applicable pre- and post-pricing “restricted period,” are well-understood and easy to implement. In the case of a direct listing, however, in which there is no underwriter to establish the offering price and no specific number of shares to be allocated and sold to the public, the start and end dates for the Regulation M restricted period, to the extent it applies to a direct listing, are unclear.

To provide some certainty as to this question, but without conceding that its direct listing constituted a distribution for Regulation M purposes, Spotify sought and received a no-action letter from the SEC Staff. The SEC Staff agreed (subject to the facts and circumstances presented) that it would not recommend enforcement action against Spotify, Spotify’s financial advisors, or the registered shareholders if the restricted period observed in this context (in relation to communications or activities not otherwise excepted under Regulation M) both:

• Commenced five business days (the typical pre-pricing period in a traditional IPO) prior to the designated market maker’s determination of the opening price of the Spotify shares on the NYSE
• Ended with the commencement of secondary market trading on the NYSE

By obtaining this no-action letter, Spotify was able to provide clarity to its shareholders and the market regarding the types of activities and communications permissible in the context of the direct listing and signaled that normal course trading activity was expected to resume on the listing date (essentially, after the first trade on the exchange).

On April 3, 2018, Spotify opened for trading on the NYSE. The NYSE’s initial reference price that was published to the market pre-trading was US$132.00 per share, which was in line with the highest sales price per share of US$132.50 for private transactions from January 1, 2018 through March 14, 2018, as disclosed on the cover page of the prospectus. Given the lack of an initial “price to public” at which the underwriters would sell shares to investors, the buy and sell orders that were being balanced by the designated market maker took longer to reach equilibrium around an opening trading price and the shares did not open for trading until shortly after 12:30 pm ET. The opening price of the shares was US$165.90 per share. The shares experienced relatively low volatility in trading on a high volume of shares (day one trading volume of 30,526,500 shares with 178,112,840 shares outstanding) and closed the first day of trading at a price of US$149.01 per share. With an intraday volatility of 12.3% on the first day of trading, Spotify’s shares experienced low volatility compared to other large technology IPOs in the past decade.  [14] Overall, the listing day accomplished Spotify’s main goals in this process by providing liquidity to the company’s shareholders, equal access to all buyers and sellers, a transparent process, and a trading price that was determined by market-driven supply and demand forces.

Choosing the Path to Going Public

While Spotify proved that a direct listing is a viable alternative to an underwritten IPO, the process is certainly not right for every issuer. The success of Spotify’s direct listing was due in part to Spotify being a well-capitalized company with no immediate need to raise additional capital, while also having a large and diverse shareholder base that could provide sufficient supply-side liquidity on the first day of trading, as well as a well-recognized brand name and an easily understood business model. In addition, Spotify’s founders, board of directors, and senior management were comfortable having no involvement in establishing a market valuation and initial “price to public” of Spotify’s shares. Companies that do not share these traits may not be the right fit for a direct listing.

Nonetheless, even companies pursuing traditional firm commitment IPOs may look at aspects of Spotify’s direct listing and apply them in their offerings. For example, could IPOs without lock-up agreements or with shorter lock-up periods begin to enter the market? Will other companies choose to conduct an Investor Day like Spotify’s and forego more traditional, small-group meetings held as part of a road show?

While radical departures from the traditional IPO playbook are not imminent, elements of the direct listing process could start to filter into the traditional IPO process.

1 Spotify’s Today’s Top Hits playlist has more than 20 million followers as of this writing. (go back)

2 While a direct listing is an innovative structure, there are examples of certain analogous structures in which companies have listed on a US exchange without an underwritten offering. These structures include, among others, (1) a spin-off by a public company of a subsidiary without registration under the Securities Act in accordance with Staff Legal Bulletin No. 4; (2) the emergence of a public company from bankruptcy under Chapter 11 of Title 11 of the United States Bankruptcy Code; and (3) a listing on a US exchange by a foreign private issuer that is already listed on a non-US exchange. (go back)

3 S e e Renaissance Capital IPO Intelligence , “2017 IPO Market: Good, But Not Great,” available at  http://www.renaissancecapital.com/review/2017USReview.pdf. (go back)

4 S e e Renaissance Capital IPO Intelligence , “Mega Deals Drive Biggest First Quarter in a Decade,” available at  http://www.renaissancecapital.com/review/RenCap1Q18_US_IPO_Review.pdf. (go back)

5 Approximately 10,000 unique viewers watched the Investor Day presentation live. (go back)

6 A foreign private issuer, or FPI, is an entity (other than a foreign government) incorporated or organized under the laws of a jurisdiction outside of the US unless: (1) more than 50% of its outstanding voting securities are directly or indirectly owned of record by US residents; and (2) any of the following applies: (i) the majority of its executive officers or directors are US citizens or residents; (ii) more than 50% of its assets are located in the United States; or (iii) its business is administered principally in the United States. FPIs enjoy a number of key benefits not available to domestic US issuers. These include, among others: (1) FPIs may file financial statements in US Generally Accepted Accounting Principles (GAAP), the English-language version of International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board or local GAAP; (2) FPIs are not required to file quarterly reports on Form 10-Q or current reports on Form 8-K; (3) the financial information of FPIs goes stale more slowly in a registered offering; (4) FPIs are exempt from the US proxy rules; (5) FPIs are exempt from Regulation FD; (6) FPIs are exempt from Section 16 reporting; (7) annual reports of FPIs on Form 20-F are not due until 120 days after fiscal year-end; and (8) FPIs enjoy exemptions from SEC and stock exchange corporate governance and other requirements. (go back)

7 A resale registration statement is a registration statement filed with the SEC that registers under the Securities Act the resale of outstanding securities by the holders of such securities pursuant to the registration statement as long as the registration statement remains effective. Typically, a resale registration statement is filed on Form S-3 or F-3 because such forms allow a company to forward-incorporate reports filed under the Exchange Act and therefore keep the registration statement up to date with all material information regarding the company without filing a post-effective amendment or prospectus supplement. However, in order to be eligible to use a Form S-3 or F-3 registration statement, a company must, among other requirements, have been subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act for at least 12 months. As a result, Spotify filed its resale registration statement on Form F-1 and Spotify filed its results for the first quarter of 2018, and Spotify also filed a prospectus supplement to update the resale registration statement. Due in part to the registration on Form F-1 (a Securities Act form), Spotify observed a traditional “quiet period” while the registration statement was effective (much to the chagrin of the financial press). (go back)

8 If an issuer has not been subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act for a period of at least 90 days immediately before a sale, then Rule 144(d) requires that a minimum of one year must elapse between the latter of the date of the acquisition of the securities from the issuer or an affiliate of the issuer and any resale of such securities in reliance on Rule 144 for the account of either the acquirer or any subsequent holder of those securities. Rule 144(d) applies to both sales by an affiliate or a non-affiliate of an issuer. Additionally, any person who is an affiliate of a reporting issuer, or any person who was an affiliate at any time during the 90 days immediately before a sale, must also satisfy, among others, Rule 144(c)(1), which requires the reporting issuer to have been subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act for a period of at least 90 days immediately before a sale. As a result, for the first 90 days after Spotify was subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, neither affiliates nor non-affiliates who had held shares for less than a year would have been able to sell shares pursuant to Rule 144. (go back)

9 Forms S-1 and F-1 require the inclusion of the information required by Item 508 of Regulation S-K. While Item 508 of Regulation S-K is entitled “Plan of Distribution,” it is market practice in a registration statement for an underwritten IPO that the information required to be disclosed under Item 508 is included in a section entitled “Underwriting,” mainly because the disclosure requirements regarding the underwriters in that section. In resale registration statements, for which no underwriters are typically named, it is market practice that the information required to be disclosed under Item 508 of Regulation S-K is included in a section entitled “Plan of Distribution.” (go back)

10 It is worth noting that because the financial advisors did not act as underwriters or otherwise participate in investor solicitation or distribution activities on behalf of Spotify, the Spotify direct listing did not trigger the filing and approval requirements that apply to a traditional IPO under the corporate financing rules of the Financial Industry Regulatory Authority (FINRA). Moreover, since there was no “allocation” of Spotify shares, FINRA’s new issue allocation rules were likewise not applicable. (go back)

11 Securities Act Rule 433(h)(4) provides the formal definition of “road show” as an offer (other than a statutory prospectus) that “contains a presentation regarding an offering by one or more members of an issuer’s management … and includes discussion of one or more of the issuer, such management and the securities being offered.” Securities Act Rule 433(h)(5) defines a “bona fide electronic road show” as a road show that is a written communication transmitted by graphic means. Although free writing prospectuses (FWPs) are generally required to be filed with the SEC and a road show for an offering that is a written communication is a FWP, Rule 433(d)(8) makes clear that such road shows are not required to be filed (unless an issuer at the time of the road show is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act, which is the case in a traditional IPO). Even in the context of an IPO, a road show is not required to be filed pursuant to Rule 433(d)(8)(ii) if the issuer makes “at least one version of a bona fide electronic road show available without restriction by means of graphic communication to any person, including any potential investor in the securities … .” In an IPO, it is common to record the first road show presentation and post it on the internet for viewing by all prospective investors. This version is usually called the “retail road show.” (go back)

12 A “red herring” prospectus meeting the requirements of Section 10(b) of the Securities Act is required in order for an issuer to make written offers and, subject to certain exceptions, use an FWP. As a result, prior to commencing a road show in a traditional IPO or, in Spotify’s case, holding its Investor Day, the issuer must have filed a Section 10(b) prospectus. (go back)

13 Among other things, Regulation M prohibits issuers, selling securityholders, and other distribution participants (and their respective affiliated purchasers) from bidding for, purchasing, or attempting to induce any person to bid for or purchase the security that is the subject of the distribution during a specified period of time prior to pricing and ending at the completion of the distribution unless the activity falls within one of certain enumerated exceptions. (go back)

14 The intraday volatility on the first day of trading for three other high-profile technology company IPOs was 15.6%, 34.7%, and 48.1%. (go back)

Supported By:

Subscribe or Follow

Program on corporate governance advisory board.

• William Ackman
• Peter Atkins
• Kerry E. Berchem
• Richard Brand
• Daniel Burch
• Arthur B. Crozier
• Renata J. Ferrari
• John Finley
• Carolyn Frantz
• Andrew Freedman
• Byron Georgiou
• Joseph Hall
• Jason M. Halper
• David Millstone
• Theodore Mirvis
• Maria Moats
• Erika Moore
• Morton Pierce
• Philip Richter
• Marc Trevino
• Steven J. Williams
• Daniel Wolf

HLS Faculty & Senior Fellows

• Lucian Bebchuk
• Robert Clark
• John Coates
• Stephen M. Davis
• Allen Ferrell
• Jesse Fried
• Oliver Hart
• Howell Jackson
• Kobi Kastiel
• Reinier Kraakman
• Mark Ramseyer
• Robert Sitkoff
• Holger Spamann
• Leo E. Strine, Jr.
• Guhan Subramanian
• Roberto Tallarita

Jira Software

Project and issue tracking

Content collaboration

Jira Service Management

High-velocity ITSM

Visual project management

• View all products

Marketplace

Connect thousands of apps and integrations for all your Atlassian products

Developer Experience Platform

Jira Product Discovery

Prioritization and roadmapping

You might find helpful

Cloud Product Roadmap

Atlassian Migration Program

Work Management

Manage projects and align goals across all teams to achieve deliverables

IT Service Management

Enable dev, IT ops, and business teams to deliver great service at high velocity

Agile & DevOps

Run a world-class agile software organization from discovery to delivery and operations

BY TEAM SIZE

Small Business

BY TEAM FUNCTION

Software Development

BY INDUSTRY

Telecommunications

Professional Services

What's new

Atlassian together.

Get Atlassian work management products in one convenient package for enterprise teams.

Atlassian Trust & Security

Customer Case Studies

Atlassian University

Atlassian Playbook

Product Documentation

Developer Resources

Atlassian Community

Atlassian Support

Enterprise Services

Partner Support

Purchasing & Licensing

Work Life Blog

Support for Server products ends February 15, 2024

With end of support for our Server products fast approaching, create a winning plan for your Cloud migration with the Atlassian Migration Program.

Assess my options

Atlassian Presents: Unleash

Product updates, hands-on training, and technical demos – catch all that and more at our biggest agile & DevOps event.

• Atlassian.com

Discover the Spotify model

What the most popular music technology company can teach us about scaling agile

Spotify is the largest and most popular audio streaming subscription service in the world, with an estimated 286 million users. A key part of Spotify's success is driven by the company’s unique approach to organizing around work to enhance team agility. As Spotify’s engineering teams traveled down the path towards improved agility, they documented their experience, shared it with the world, and ultimately influenced the way many technology companies organize around work. It is now known as the Spotify model.

What is the Spotify model?

The Spotify model is a people-driven, autonomous approach for scaling agile that emphasizes the importance of culture and network. It has helped Spotify and other organizations increase innovation and productivity by focusing on autonomy, communication, accountability, and quality.

The Spotify model isn’t a framework, as Spotify coach Henrik Kniberg noted , since it represents Spotify's view on scaling from both a technical and cultural perspective. It’s one example of organizing multiple teams in a product development organization and stresses the need for culture and networks.

…the Spotify model focuses on how we structure an organization to enable agility.

The Spotify model was first introduced to the world in 2012, when Henrik Kniberg and Anders Ivarsson published the whitepaper Scaling Agile @ Spotify , which introduced the radically simple way Spotify approached agility. Since then, the Spotify model generated a lot of buzz and became popular in the agile transformation space. Part of its appeal is that it focuses on organizing around work rather than following a specific set of practices. In traditional scaling frameworks, specific practices (e.g. daily standups) are how the framework is executed, whereas the Spotify model focuses on how businesses can structure an organization to enable agility.

The Spotify model champions team autonomy, so that each team (or Squad) selects their framework (e.g. Scrum , Kanban , Scrumban, etc.). Squads are organized into Tribes and Guilds to help keep people aligned and cross-pollinate knowledge.

Now, let’s demystify some of these terms…

Key elements of the Spotify model

The Spotify model is centered around simplicity. When Spotify began organizing around their work, they identified a handful of important elements on how people and teams should be structured.

Similar to a scrum team, Squads are cross-functional, autonomous teams (typically 6-12 individuals) that focus on one feature area. Each Squad has a unique mission that guides the work they do, an agile coach for support, and a product owner for guidance. Squads determine which agile methodology/framework will be used.

When multiple Squads coordinate within each other on the same feature area, they form a Tribe. Tribes help build alignment across Squads and typically consist of 40 - 150 people in order to maintain alignment (leveraging what we call Dunbar's Number ). Each Tribe has a Tribe Lead who is responsible for helping coordinate across Squads and for encouraging collaboration.

Even though Squads are autonomous, it’s important that specialists (e.g. Javascript Developer, DBAs) align on best practices. Chapters are the family that each specialist has, helping to keep engineering standards in place across a discipline. Chapters are typically led by a senior technology lead, who may also be the manager for the team members in that Chapter.

Team members who are passionate about a topic can form a Guild, which essentially is a community of interest. Anyone can join a Guild and they are completely voluntary. Whereas Chapters belong to a Tribe, Guilds can cross different Tribes. There is no formal leader of a Guild. Rather, someone raises their hand to be the Guild Coordinator and help bring people together.

The Trio (aka TPD Trio) is a combination of a Tribe Lead, product lead, and design lead. Each Tribe has a Trio in place to ensure there is continuous alignment between these three perspectives when working on features areas.

As organizations scale, sometimes multiple Tribes need to closely work together to accomplish a goal. Alliances are a combination of Tribe Trios (typically three or more) that work together to help their Tribes collaborate on a goal that is bigger than any one Tribe.

That’s it. There are not a lot of practices that need to be followed or ceremonies that need to happen. Squads may have ceremonies like sprint planning and retrospectives, but the focus of the Spotify model is on how teams organize around work. It’s up to Squads to figure out the best way to get the job done.

The benefits of the Spotify model

When Spotify changed the way they scaled agile they wanted to enable Squads to move fast, ship software quickly, and do so all with minimum pain and overhead. They realized these benefits and more as they took their model and evolved it. The organizational benefits of implementing the Spotify model include:

Less formal process and ceremony

The Spotify model focuses on organizing around work and not necessarily processes and ceremonies. This gives an organization greater flexibility when it comes to how Squads work. Instead of requiring Squads to change how they do their work (“you must do scrum”), it focuses on aligning them with each other and driving towards individual team outcomes.

More self-management and autonomy

The Spotify model encourages autonomy and creativity by trusting people to complete the work they are doing in the way they see fit. Do you need to ship software? That’s up to the Squad. Do you need to change direction? That’s also up to the Squad. The Spotify model focuses on decentralizing decision making and transferring that responsibility to Squads, Tribes, Chapters, and Guilds.

“Control leads to compliance;  autonomy  leads to engagement.”

- Dan Pink, Author, “Drive: The Surprising Truth About What Motivates Us”

The Spotify model can offer increased transparency across the work being done and grow a more experimentation-based approach to problem solving in a high trust environment. All this can lead to things like better products, happier customers, and more engaged employees. However, not everyone will experience these outcomes.

The challenges of the Spotify model

The Spotify model was based on one organization's way of working. Many organizations desire the same benefits of the Spotify model, so they attempt to emulate what Spotify did. Some organizations experienced more success than others, but it’s likely no organization experienced the same success as Spotify. The reason? Like any way of working, an organization's current culture and structure need to be taken into account. The model is simple, but the environment it's implemented in is complex.

Wise executives tailor their approach to fit the  complexity  of the circumstances they face.

- Dave Snowden, Management Consultant

Unfortunately, many organizations try to copy the Spotify model. To some, it may seem like a simple matrix organizational structure where people report to a functional area (Chapter), but work with a cross-functional team (Squad). However, it’s more complex than that. Although it may look like a matrix organization, the key cultural elements of the model need to be in place to allow the structure to thrive, such as trust and autonomy. If an organization doesn’t shift its behaviors (and ultimately its culture), the benefits of the Spotify model will never be realized. If you simply rename teams to Squads, you’re just putting lipstick on a pig.

Spotify model best practices

If you’re looking to enable a culture of trust, autonomy, and rapid learning, you can’t go wrong looking to the Spotify model for inspiration. If your organization is looking at the Spotify model as a means to help you approach agile at scale , the following is a list of best practices to keep in mind.

Don’t copy the model

Seek to understand the structure, practices, and mindset behind Spotify’s approach. With that understanding, tweak the aspects of the model to fit your own environment. Your goal is not to be Spotify, but to leverage their model to improve how your organization works together.

Autonomy and trust is key

Spotify gave as much autonomy as possible to their people in order to help them pivot quickly. Allowing teams to pick their own development tools and modify another team's code are just some examples. Within your organization, determine if there are decisions that can be pushed to the teams instead of being mandated by parts of the organization that are disconnected from the day-to-day work.

Transparency with community

Spotify’s success is credited to their focus on building community and transparency around their work. Establish your first Guild around the Spotify model adoption and encourage participation from everyone in the organization. Build trust by creating transparent, inclusive ways to gather feedback, and gain alignment on how your organization wants to work in the future.

Encourage mistakes

You will fall down and stumble in this journey. But that’s okay. Improvement involves experimenting and learning from both our successes and failures. Spotify went through many iterations before they attained the model we know today, and have since continued to experiment to constantly look for new ways to improve the way they work. Encourage the same within your organization!

If you focus on these practices you’ll see positive impacts on how your organization collaborates and aligns, whether or not you use the Spotify model as a guide.

In conclusion…

The Spotify model is a great source of inspiration if you’re looking to build an organization focused on moving quickly with autonomy and purpose. Even more formal scaling frameworks, such as Scrum@Scale , have gained inspiration from the model (and vice versa). It's important to remember that the Spotify model is not a destination. Ironically enough, Spotify doesn’t leverage the original implementation of the Spotify model anymore; they evolved and adapted the model to fit their changing organization. Trios and Alliances are actually newer elements in Spotify as they were brought about to solve new problems the organization faced as it grew larger. Starting with the key elements of the Spotify model can get you moving, but true agility comes with evolving the model to fit your context.

Taking the next step

Are you hungry to learn more about the Spotify model? Check the two-part video posted on Spotify Labs about the engineering culture at Spotify ( Part I and Part II ). You can also learn how the Spotify model compares with other scaling framework by visiting the agile at scale page on the Agile Coach.

If you’re looking to implement the Spotify model within your organization, it’s important to have the feedback mechanisms and transparency in place to generate and sustain a culture of trust and autonomy. Leveraging Atlassian’s Jira Align , organizations can organize Squads into Tribes, form Guilds and Chapters, and make product decisions transparent across the organization.

Mark Cruth is Atlassian’s resident Modern Work Expert. Focused on practice over theory, Mark spends his days coaching both Atlassian and customer teams on new ways of working, then sharing what he’s learned at events around the world.

Joining Atlassian in 2019, Mark brings over a decade of experience experimenting with work and helping people, teams, and organizations transform at places like Boeing, Nordstrom, TD Ameritrade, and Rocket Mortgage. Mark has made it his mission to inject modern ways of working, a transformation mindset, and the power of expert storytelling into everything he does.

Scaled Agile Framework (SAFe) Values & Principles

The Scaled Agile Framework® (SAFe®) is a set of organization and workflow patterns for implementing agile practices at enterprise scale.

Agile Quarterly Planning - 8 Steps to Start

Agile quarterly planning helps you build great software while keeping the big picture in mind. Start here with 8 steps as your quarterly planning template.

Spotify: An ITIL® Case Study

• IT Services
• Digital transformation

Author   Ola Källgården

Management Consultant, Olingo Consulting AB

February 3, 2019  |

  15  min read

Spotify is the largest global music streaming subscription service. It is building a two-sided music marketplace for users and artists, which is powered by data, analytics, and software.

In this case study, Ola Källgården reveals how Olingo, a Swedish management consulting company, helped Spotify to embrace the principles of ITIL.

To read the rest of this white paper and to get access to all of Axelos' white papers, please log in or create a user profile .

About Olingo Consulting

Olingo is a Swedish-based management consulting company that works in both the IT service management and agile communities. Most of Olingo’s assignments are focused on striking the right balance between control and agility and finding a relevant level of steering and structure, while also allowing innovation and experimentation, upholding compliance, and maintaining efficiency. Olingo also delivers training services in the form of courses and simulations within the ITIL, DevOps, Management3.0 and Agile methods.

About Spotify

Spotify’s mission is to unlock the potential of human creativity by giving one million artists the opportunity to live off their art, and billions of fans the chance to enjoy and be inspired by these creators.

Spotify is the largest global music streaming subscription service. It is building a two-sided music marketplace for users and artists, which is powered by data, analytics, and software. Spotify provides fans with a way to discover and enjoy music, and artists with an additional avenue to make money and showcase their creative works. For artists, Spotify provides a platform from which they can reach and interact with their fans, as well as analytics which provide a better and more thorough understanding of their fan base.

Introduction

A key message within Spotify is speed. Making deliveries flow is paramount to maximizing resource utilization. The underlying drive is the need to deliver and improve faster than the competition. In the words of Jack Welch, ‘if the rate of change on the outside exceeds the rate of change inside, the end is near’.

The importance of speed, together with a culture of continuous improvement and autonomy, has a profound impact on the way that processes are designed and improved at Spotify. The focus lies on the purpose and objective of the process rather than on the process activities.

In 2017, the organizational growth at Spotify was massive. Teams that used to work side by side now found themselves scattered around the world. The pending introduction on the American stock exchange introduced new compliance requirements. The organization experienced growth pains, and the need for company-wide policies and common ways of working increased.

Olingo Consulting was contracted to support part of the organization in striking the right balance between control and agility, including the financial systems (FS) support team, which was highly impacted by the regulatory requirements.

The Olingo consultants were brought in to act as agile coaches, and their mission was to gently guide each team by leading them in the right direction. Olingo worked closely with other agile coaches within Spotify on this assignment. There was no project or organizational change programme, and the results were to be reached as part of continuous improvement activities.

The following areas were within the scope of the assignment:

• Managing flow Finding an efficient way to manage the total workload for the teams, including change requests, incidents, technical debt and projects.
• Managing compliance Ensuring that the controls were in place to comply with the regulation imposed by the financial bodies.

At Spotify, work is organized around cross functional, autonomous teams. This means that each team possesses all the capabilities required to drive a piece of work all the way to completion. Hand-offs from one team to another are rare, and avoided wherever possible. Each team is responsible for achieving its mission and reaching its goals but, in return, has the mandate to form a way of working that best fits the team. The FS team is responsible for delivering IT services that are used by internal functions, such as tax, procurement and accounting. When Olingo began working with Spotify, these services were running on an enterprise resource planning (ERP) platform and the FS team was responsible for developing the services as well as improving and supporting them. These services were highly impacted by the compliance requirements imposed by the regulatory bodies. In addition, the FS team had a key challenge at this stage, to move from an on-premise ERP to a mix of various best in class cloud ERPs, in a very limited timeframe. Due to the time constraints, most people involved thought this could not be done in time.

Many other teams at Spotify were impacted by Olingo’s work, but for this case study, only the FS team will be used as an example, and referred to as ‘the team’.

The Spotify culture and ITIL

Transparency, visualization and an agile mindset are, together with speed, the driving forces and mantras within the Spotify organization. A key part of the agile mindset is the concept of mission command and autonomous teams. The teams at Spotify were used to getting a clear mission and then, internally within the team, forming the tactics and capabilities to deliver. This mindset had a profound impact on how work was performed and improvements made.

When Olingo began its assignment, ITIL, as a framework, was relatively unknown within the Spotify organization, and some staff members felt that using frameworks slowed them down. However, closer scrutiny proved that very few of the staff members making these remarks had any first-hand experience with ITIL. The ITIL framework served to guide the work being carried out, and implicit references were made to several of the ITIL processes throughout the assignment, including change management, demand management, incident management and request fulfilment.

Managing flow

One challenge for the team was to manage and prioritize the workload in an efficient manner. The team had several customers within the organization, and each of them expected the team to focus on their function’s specific needs. Another challenge was managing the different types of work the team was responsible for performing. Requests for new features from internal customers were mixed with support requests and the need to work on technical debt and strategic projects.

A ticket management tool was in place and being used, but there was difficulty in understanding the order of priority of the tickets logged in the system. The ticket management system was a great place for storing information, but it was not providing great visibility of the total workload. What was needed was a way to visualize the workload so that items could be prioritized, and flow created. However, visualizing the team’s workload was just the first step. In total, four key challenges were identified:

• visualizing the total workload
• managing work overload
• coordinating the needs of internal customers
• managing different types of work.

Visualizing the Total Workload

To get a clear view of the workload, it first had to be lifted out of the ticket management system. The concept of Kanban and a Kanban board was widely spread within Spotify but had not, until then, been used by the team. The work being done by Olingo and their fellow coaches provided a great opportunity to make use of Kanban, in conjunction with ITIL, to track and prioritize different processes carried out by the team. A portable whiteboard was used, and tickets from the ticket management tool printed. The first version was basic, but kicked off discussions and ideas for improvement. The work items were sorted into columns, with each column representing a stage in the workflow, for example ‘to do’ or ‘work in progress’. One challenge that immediately became obvious was the size of the workload. Even if the team had realized that the workload was hidden in the ticket management system, the situation was worse than expected.

Managing Work Overload

To make the workload manageable, work in progress (WIP) limits were introduced for each column. The WIP limits provide an upper boundary on how many work items can be allowed in each column. A limit of three would mean that a maximum of three work items would be allowed at any one time. To ensure that each item had an owner and that individual staff members were not overloaded, so called ‘avatars’ were introduced. An avatar is a representation of a team member, in this case in the form of a whiteboard magnet with the person’s picture on it. For each team member there were two magnets, meaning that a team member could be assigned a maximum of two work items at the same time.

Now that the workload was visualized the next challenge became apparent; how could the work items in the ’To do’ column be managed? This was particularly problematic as most of the work items in this column came from outside of the team.

Coordinating the Needs of Internal Customers

The team had several customers within the organization, each with their own specific needs, requirements and expectations regarding the IT services provided by the team. An advisory board, similar to a change advisory board (CAB) found in ITIL, was needed. However, merely making decisions and planning changes and feature requests would not suffice. Getting input on changes and new feature requests would surely help, but the team would still be left with the challenge of prioritizing its entire workload. This included prioritizing different ITIL processes, such as both incidents and service requests, against change requests.

As a first step, weekly planning meetings were arranged and key stakeholders from each internal customer invited. The visualization of the total workload was an eye opener to all the stakeholders. It was easy for them to see that pushing more work on the team when they were already at full capacity would not move things forward. Just getting the stakeholders together in the same room created a world of difference compared to meeting with them individually. Constructive discussions started and synergies between the stakeholders emerged. Above all, the stakeholders realized that the team had limited capacity and that there was a need to prioritize what was most important for the entire organization, not only for the individual function.

There were still times when everything seemed urgent and of equal importance, but instead of breaking the WIP limit of the ‘to do’ column, the team found another way. They simply left the room and asked the stakeholders to come to an agreement of what work should be prioritised, in line with the ITIL guiding principle of ‘focus on value’. It should not be for the team to decide what is most important from a business perspective.

Managing Different Types of Work

The customer meetings made it possible to choose and prioritize the work items coming from the business. However, there were other types of work items in the team’s total workload and some of them, such as resolving technical debt, were not on the customers’ radar. After some discussion it was agreed that the work items could be divided into four categories:

• enhancements (new features and changes)
• technical debt

This made the other types of work items visible to the customers but, as the customer saw their enhancement and support requests as more urgent, technical debt and project work still had difficulties reaching the WIP column. The team realized that something had to be done to make those work items that were less urgent, but equally important, flow. The solution was to introduce limits on the different types of work. Even though this created some initial protests from the customers, it proved successful in the long run as the customers started to see the positive impact of removing technical debt and increasing the overall quality of the IT service.

In addition to the weekly planning meetings with the business, the team conducted daily stand-ups to ensure that work was on track and blockers removed. Retrospectives with the objective of improving the ways of working were also performed, both in planned meetings and as daily improvement activities. New things were tested, some of which were kept and others discarded.

Benefits realized included:

• Increased work flow More work items were completed, and lead times shortened.
• Reduced waste More time was spent on the work items that created most value.
• Increased quality More technical debt was resolved, and work on infrastructure projects increased.
• Improved relationships with and between customers The visualization and regular meetings that were set up created synergies and mutual understanding of the needs and situation of each stakeholder involved.

Managing compliance

The other part of Olingo’s assignment focused on ensuring that the regulatory controls, imposed and audited by financial bodies due to the stock exchange entry, were adhered to.

The concept of team autonomy had an important role to play in this case. The plan was to introduce generic change, test and release management processes to roll out to all the teams that were impacted by the financial regulation. There were several specific controls to comply with, but the ones that impacted the financial teams the most were the segregation of duty and audit trail requirements. Segregation of duty means that relevant, and separate, roles must be involved in testing and approving changes, and audit trailing means that it must be possible to track all changes made to the financial system.

The processes were drafted, and the team owning the process tool was involved to make the necessary changes to the workflows in the tool. Meetings to go through the processes and planned tool updates with each team and decide how to perform the implementation were arranged. However, instead of getting the acceptance that was expected, Olingo were hit by a flood of questions and comments:

• Why do we need these controls? They seem to slow us down.
• Why should we have a change process that looks like that? We already keep track of all our changes but we work differently to that.
• Why does that role and person need to be involved? They don’t have the time to approve on that level.
• Why are we making that change to the process tool? We use categories in a different way.

Some of the questions and comments could be easily addressed while others proved more difficult to answer. The team autonomy had led to vastly different ways of working and individual ways of using the process tool. The Olingo consultants had made the mistake of acting as teachers instead of coaches and it was clear that they would have to re-think their tactics. They re-grouped and approached the assignment from a different angle, reformulating the message as:

‘These are the regulatory rules you need to comply with. They are a requirement for reaching the organizational goal of stock exchange entry. You need to find a way to comply with these rules. We, together with the internal audit team and the process tool team, are here to help you.’

That message had a completely different effect. The teams listened carefully to the requirements and asked questions to get clarifications. Examples of questions that were raised include:

It was clear that each team had an underlying objective in mind, to comply with the controls while maintaining minimum impact on flow and speed.

The outcome was that each team had its own way to successfully fulfil its requirements, including its own process flows, configuration of the process tool, and way of interacting with key stakeholders. This could have increased some costs and caused some challenges, especially for the auditors, but the drawbacks were overshadowed by the benefits. The flow of work increased, as each team could create a process that fit its own requirements. This, in combination with the benefits of each team taking full responsibility for complying with the controls, and not having the option of blaming a faulty process, created far more value to the organization in the long run.

• Can we set up categories of changes and have different approval flows for them?
• Is it enough to document the reason for the change in the change ticket?
• How can we get approval if a key role is vacant or absent?
• If a change has been approved at an earlier step in the process, does the technical update need approval before being put into production?

The entry on the American stock exchange was successful and the improvement work continues at Spotify. Staff interest in ITIL has increased since the assignment, as the value of the framework has become clear, and recently, Olingo delivered formal ITIL training at Spotify. Although the adoption of ITIL is still ongoing at Spotify, the organization is making great steps towards improving its processes, and already understands and adheres to the ITIL principles better than most companies. They have realized that processes should not be created and obeyed just for the sake of it. The ITIL framework is based on best practice and common sense and Spotify has plenty of that. The processes are there to support the organization in achieving its goals and, as long as the process fulfils its objectives and constraints, there are no rules for its design.

About the author

Passionate about striking the right balance between order and chaos, Ola Källgården bends and twists frameworks, models and philosophies into something that is truly useful.

Ola has experience from a range of different roles within the IT world, including developer, business analyst, project manager, organizational change manager and management consultant.

Apart from guiding and coaching clients Ola is also a public speaker as well as an acclaimed and accredited ITIL and DevOps trainer.

Spotify: An ITIL case study infographic

• ITIL_x_Spotify_infographic.pdf

Spotify: An ITIL case study

• Spotify an ITIL case study

We stand with Ukraine and our team members from Ukraine. Here are ways you can help

A Community Of Over 800,000

A UX/UI Case Study on Spotify

• September 29, 2020

For this case study, I will be focusing on the modern music streaming platform — Spotify.

This case study was completed as an independent project during a four day sprint while I was a student at Ironhack. I was challenged to create a new feature to an already existing and highly adopted app, so I chose to work on one of my favorite apps for streaming music, Spotify!

Music streaming has changed  so much  over the past few years in response to the digital revolution. What seems to feel like a lifetime ago, people were using MP3, Napster, iPods and even resorting to not so legal ways to download and listen to music. And before that, there were CDs, cassettes and vinyls. Although the idea of having a record player at home and lining up outside the store to buy the latest music drops seems charming and entertaining, I couldn’t imagine not having music at finger tips — available whenever and wherever I want it! The evolution of music streaming in itself is a topic I could talk about for hours, but for this case study, I will be focusing on the modern music streaming platform —  Spotify .

This week’s design challenge at  Ironhack  was to  incorporate a new feature  for an existing and highly adopted app. I chose Spotify because it completely changed the streaming industry in 2008 by setting the trend for subscription based music streaming services. It has also been my music streaming platform of choice for years now.

During this  four day sprint,  we focused more on  visual design  and  Atomic Design Principals  and developed our ideas to hi-fidelity prototypes. I was both excited and nervous about this weeks project since it was my first solo design project, but I am  big  on challenging myself, so I felt that it was the perfect time to tackle my own project.

So, let’s get started!

Just to give you a bit of background, Spotify is a music streaming platform — the biggest in the world by number of subscriptions. It was founded in Sweden by Daniel Ek and Martin Lorentzon, and eventually launched in 2008. As of March 2020, they have  248 million monthly active users , compared to Apple Music that has about 68 million users. Spotify uses a freemium model that offers users a free tier that includes ads, and a premium subscription for a monthly payment.

“Our mission is to unlock the potential of human creativity — by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it.” — Spotify Mission Statement

Lean UX Canvas

Using the Lean UX Canvas, I outlined the current state of Spotify and wrote down my assumptions that I began within boxes 1–4. Since this is a living document, I revisited it to make updates as I went through the Design Thinking Process.

Competitive Feature Analysis

I started off my research with an analysis of Spotify’s direct competitors — Apple Music, Youtube, Soundcloud, and Google Play. I compared their features in the snapshot below.

Competitive Positioning Chart

I mapped out the competitors’ positions in relation to the axes to better visualize areas of opportunity and the competition. I decided to compare them based on the level of social interactions that they facilitate and the level of personalization that each platform allows for their users.

Spotify’s app can be personalized for premium users but is more so for private use. The “Blue Ocean” is an opening in the current market without many competitors which symbolizes an area of opportunity that I believe Spotify can enter with an additional feature. Although I had originally wanted Spotify to move towards a social adaptation, I decided to pivot later on in the process to create a more advanced personalization feature after getting some user insight.

User Research

I started off my user research with a survey of 12 questions. Surveys have been a really valuable tool for gathering a large amount of quantitative data, so I took some time to craft my questions to reflect the information I really needed at the beginning of my process.

I posted my survey in a Slack channel and a few Reddit pages related to music and received about  65 responses in 24 hours.

Here are some important statistics relevant to my project:

• About 60% of respondents said they use Spotify
• 90% said they listen to music for both pleasure and when doing other things (driving, working)
• Only about 1/3 of people like the personalized playlists that their platform creates for them

The last bullet point validated the need for a better-personalized playlist feature , so I decided to run with it and dive into some more user research to see where I can add value!

I conducted 5 interviews with people who use Spotify and/or Apple Music. I got A LOT of valuable insights from my interviews. One of the most surprising pieces of information that I found was the fluid nature of my interviewee’s streaming service choices depending on their needs. Their preferences constantly shifted based on the music experience they were looking for, attributing each platform its own function and purpose.

For example, users brought up the variety and diversity of music that Youtube and Soundcloud offered. When asked about finding new music, 4/5 people said they find more new music either through Youtube or Soundcloud.

“If I was able to find new music easily on Spotify, I wouldn’t be using Soundcloud or Youtube.”

However, I had to keep in mind that these platforms have an advantage for music discovery because some music is exclusively on Youtube or Soundcloud.

I converted all of my recorded interviews and survey results into digital sticky notes using  Miro . This week I discovered a new tool in Miro that made data synthesis so much faster! In the sticky notes feature on the sidebar, there’s a “ Bulk Mode ” button that allows you to type several sticky notes at once instead of doing them one by one. This cut my synthesis time down by so much! (Credit to our TA, Kathryn)

Affinity Map

After dropping all of my data onto sticky notes, I organized them onto my Affinity Map with themes and color-coded them by streaming service . I found that several of the insights were very much interrelated with one another, so connections between ideas are indicated with arrows .

The most prominent themes are:

• Finding new music

Many of the smaller headers are sub-themes that branch off of the two bigger themes.

Some key findings:

• Most of the data points were related to finding new music and playlists
• People find a lot of new music on Youtube
• Playlists are defined by their “vibe”
• The word “vibe” came up a lot in the interviews — this will be an important term that I will revisit later in my case study
• Songs on a playlist should have a similar sound and consistent genre variation
• People value finding new music/artists that are aligned with their preferences

Customer Profile

Stratagyzer’s Value Proposition Canvas  is another great tool for identifying customers’ jobs (things they need to get done), pains, and gains. This tool helps us better understand the customer we are creating value for. The customer profile connects directly to the second part of the canvas — the value map, which describes the elements of the value proposition.

Customer jobs can be  functional, social and emotional . Most of the customer jobs above are either emotional or social, which indicates that several gains and pains also fall into that category.

Task Analysis

The task analysis is a visual used to map out the path that users take to create a playlist. Although there are several different ways to create a playlist on Spotify, I used my interview data to choose the steps that users would usually take.

User Journey Map

A user journey map is useful for getting a more complete view of the user’s experience for a specific task. The goal is to find the significant low points or problems that the user is facing. It’s also a great time to highlight the thoughts and emotional aspects of the user’s experience.

The user’s journey is centered around creating a new playlist for an upcoming activity (like a road trip). First, the user may think about a future activity, which will motivate them to create a playlist to make it more enjoyable. The user experiences low points when:

• Thinking about suitable songs to start the playlist
• Looking through their library to find songs to add to the playlist
• Listening to the songs recommended by the Spotify Algorithm
• Trying to find similar songs to the ones they already have on their playlist

After identifying these four pain points, I quickly wrote down some opportunities and ideas to use during ideation.

I synthesized the pain points into a  problem statement.

Problem Statement

Then, I converted the problem statement into four  “How Might We”  statements:

• HMW make sorting through the personal library easier and more specific to users preferences
• HMW make newly recommended songs align more with users taste and requirements for the  vibe
• HMW help users curate songs with a similar sound to make creating a playlist easier

This is just another way to frame the problem by turning them into questions to better prepare myself for ideation!

Ideation is one of my favorite parts of the process!

Collaborating with my classmates  Sebastian Benitez ,  Christina Rice  and  Dave Ostergren  for a brainstorming session was awesome! We came up with about  80+ ideas in 15 minutes  using the  time-boxing  method to really push us forward.

Here’s what our brainstorming session looked like:

 After brainstorming some ideas for each HMW statement, I reshaped the best ideas into stars and diamonds then made  three umbrella headers  that the ideas are categorized into —  A sorting/filter feature, a “vibe” feature and a playlist creating helper.

Organizing all of the the contents and ideas from the brainstorming session was a vital step before moving on to prioritizing the ideas since there were so many to consider and analyze. I really enjoyed this part of the process because it allowed me to arrange the detailed ideas under three overarching ideas and set myself up for prioritization.

MoSCow Method

I further categorized the ideas from brainstorming into the MoSCoW Method chart pictured below to  prioritize  the features into Must Haves, Should Haves, Could, Haves, and Won’t Haves.

The must haves are the  mandatory features  that   are key to solving the users problems. These include the  three umbrella solutions and their corresponding ideas.

After prioritizing the features, I was able to define the products necessary to make my idea work, in addition to the gain creators and pain relievers on my Value Proposition Canvas.

The products and services on the left of the canvas are color coded to correspond with the gain creators and pain relievers on the right.

Just to recap, the pain points are :

Although the sprint was short and my workload for the week was high, I still wanted to incorporate a solution that solved both problems related to creating a playlist AND finding new music.

My Minimum Viable Product includes a solution to address both pain points (creating a playlist and finding new music).

Job-To-Be-Done

When Spotify users want to make a playlist for a future activity (I used an upcoming road trip for this scenario), they will “hire” Spotify to create a desired “vibe,” curate songs in their library (already saved songs), and be exposed to similar songs — the perfect opportunity to suggest new songs for the playlist based on user specifications like specific genres, artists and tags .

At the end of the day, the goal is to make whatever experience that the user is creating the playlist for to be more enjoyable. So my job is to help them fulfill their vision so that they are excited about hearing it in the future, and hopefully listening to it several more times.

Next, I created the user flow based on this job-to-be-done to create a visual representation of the path that the user will take to create a playlist with the new feature. The user flow also includes instances of human interaction (taps) and places where onboarding is necessary.

 PROTOTYPING

I created a low-fi prototype for the process of creating a playlist, incorporating the new filter feature.

Low-Fidelity Prototype

After conducting usability testing using  Maze , the heat maps indicated that many miss-clicks occurred where there were no clear guidelines for each step and also when people followed their natural tendencies. Seeing where people tapped enabled me to  design the feature so that it would fit into their mental models  instead of trying to go against it.

For example, many people clicked  “liked songs”  on this screen because that’s what they are used to doing when they create playlists. So I used this insight to make the next iteration more intuitive by guiding the user through the liked songs page to pick a few songs to start the playlist.

Another indication that people go to their “liked songs” or “library” to create a playlist using songs they already have saved.

Mid-Fidelity Prototype

For my mid-fi, I used the atomic design principles to build out my “atoms” and “molecules” that would later become icons, buttons, and footers that I used repeatedly throughout the entire design.

 After testing my mid-fi, I added a few more changes to the layout of the screens and updated the prototype with colors and pictures for my hi-fi.

Hi-Fidelity Prototype

Here is a high level overview of my hi-fi prototype. I tried my best to make it look as close as possible to Spotify’s interface!

Here’s a step-by-step micro-level view:

The process begins by going to the library and pressing “create playlist”and giving it a name. Let’s say we are going on a road trip!

After pressing “add songs” users would go directly to the liked songs page and would be prompted to choose as many songs as they would like to start the playlist as a basis for the “vibe.” Once a few songs are selected, users go to “Find your vibe” which is where they can specify preferences for suggestions.

The tag can be defined as a label or set or labels attached to each song. Songs can have several tags that describe their “vibe” or mood. Tags are reported by users themselves, and the most prominent tag is displayed on these screens. However, if the user wants to find songs with the same tag, they can click each tag to be taken to the “tag dashboard” where songs with the same tag are listed. — This is yet another way that users can add songs of a certain “vibe” and find new music!

Then, users go through the filter feature of drop down menus to select their specific criteria for suggestions. Here, the user can be as  specific  or as  vague  as they would like, to accommodate very specific preferences and those who are more open to a variety of suggestions.

Spotify will first recommend songs within the library of saved music and users will have the option to add all or a add a few to their playlist.

Then, there will be an option to add *new* songs that are similar and also fall under the user’s preferences that were designated earlier.

The user can also share their playlist with a friend for collaboration!

Here’s a link  to my presentation if you would like to see a live walk through of the hi-fi!  (Go to slide 30)

Success and Failure Metrics

We will know if the new feature is a success through these metrics:

• Less time creating playlist
• Higher Satisfaction
• More People Use Feature
• Save newly recommended music

And we will know if the feature is a failure through these metrics:

• More time creating playlist
• Lower Satisfaction
• Users don’t Use Feature
• Disproval of recommended music

Knowledge Gaps

If I had more time, I would’ve loved to do some in-person usability testing with some of my friends to get some more insights on the way they use Spotify. I would’ve also loved to dive deeper with a second round of interviews focusing on the other music streaming platforms that they mentioned, like Youtube, to see which features they find most valuable and exactly how they use them. I believe that there are features that Spotify could potentially adopt from the other music streaming platforms that would give users additional value.

• Finish atomic design inventory
• Test the hi-fi prototype and make another iteration
• Develop the tag feature for multiple functions

I am not the user even if I use the app! Although I am a loyal Spotify user , I had to keep reminding myself not to accept my assumptions as facts. It’s a universal UX principal to always keep the users at the center of the design.  

Adopt the users’ language and make it a part of the product! Like I mentioned earlier, the word “ vibe ” kept coming up in my interviews, so I knew that this is something that may be universally understood across the music listening community. I incorporated it into my design to further relate to the users and use a language that they can appreciate.

Overall, this project was extremely rewarding! Spotify is an already amazing music streaming platform with features that go above and beyond. So the challenge to create an additional feature that adds value was definitely challenging. I enjoyed going every step of the Design Thinking Process and being able to go all the way through a hi-fi prototype!

Let me know if you have any thoughts or comments! Feel free to connect with me on  LinkedIn  as well. And if you’re in the mood to listen to some of my *very much incomplete* playlists, here’s my  Spotify .

• Consumer products , Content and Copy , Design , Interface and Navigation Design , Product Releases and Redesigns , Prototypes , Visual Design

Delawit Assefa is a UX/UI Designer in the Washington D.C. Area, a recent first-generation college graduate looking for new opportunities. She is passionate about user-centered design, problem-solving, and storytelling through different mediums and is looking forward to creating meaningful experiences and bridging the gap between technology and human experiences through design in her career.

Related Articles

Designing for privacy in an increasingly public world.

• Design , Privacy and Data Security

As consumers’ privacy concerns continue to grow, so should our attention to addressing privacy issues as user experience designers.

• The article delves into the rising importance of addressing privacy concerns in user experience design, offering insights and best practices for designers and emphasizing the role of client cooperation in safeguarding user privacy.

Share this link

• February 15, 2024

Unveiling the Influence of Cognitive Biases on Design Decision-Making

• Design , Human factors , Psychology and Human Behavior

Navigating the Creative Landscape.

• The article explores the influence of cognitive biases on design decision-making, outlining various types of biases and offering strategies for mitigating their impact to foster inclusivity and objectivity in design processes.
• February 27, 2024

Do Founders Even Care About Design?

• The article emphasizes the importance of design in startup success, highlighting the risks of ignoring user feedback and the necessity of effective communication between founders and designers.
• March 7, 2024

Did you know UX Magazine hosts the most popular podcast about conversational AI?

Join 740,000 designers, thinkers, and doers.

This website uses cookies to ensure you get the best experience on our website. check our privacy policy and.

LinkedIn connects with audiences through a multi-format campaign

Written by Spotify Editorial Team

Brand vertical:  Tech Objective: Awareness Target audience:  Students, Young Professionals A18-35 Targeting used:  Interest/Behavior, Age Market:  Germany Flight length:  05/22/23 - 06/30/23 Activation channel: Direct Agencies: Mediaplus, PUK Format:  Podcast Media, Homepage Takeover, Leaderboard, Overlay, Sponsored Playlist, Video Takeover

During a recent rebranding effort, LinkedIn wanted to raise awareness of the platform's value among Gen Zs . Specifically, the brand wanted to reach students, graduates, job seekers, and newly employed users, with their new slogan—"Find your 'in'"—to emphasize that the social platform offers everyone the chance to build connections.

By focusing on themes like first jobs, diversity, and personal growth, LinkedIn hoped to grow awareness of this new messaging among Spotify users in Germany.

The Solution

The LinkedIn advertising campaign included a strategy across multiple formats to build strong connections with audiences. It incorporated a combination of audio ads, video ads, and sponsorships of the "Study Bundle" and "Fit mit Beat" playlists targeted to Students, Graduates, Jobseekers, and Young Professionals. The campaign also included podcast ads on popular programs in Germany including Gemischtes Hack , Fest & Flauschig , and Hobbylos .

The campaign encouraged users to "find your 'in' and go to LinkedIn." The Spotify ads neatly complemented the brand's external TV and influencer efforts, repurposing the messaging to optimize for digital audio and video ads. The overall campaign was a collaborative effort between the brand, media agency Mediaplus, and creative agency Philipp & Keuntje (PUK).

The campaign landed with listeners and viewers alike, inspiring familiarity, intent, and other uplifts among its target audience:

points in Platform Familiarity

points in Website Visit Intent

points in Agreement that LinkedIn is "helpful for my future career"

points in Message Association

The Takeaway

As a media partner, Spotify can help brands elevate their key attributes and meet their business objectives. Spotify's broad range of ad formats—from audio and video to sponsored playlists—can help brands connect with engaged audiences.

"To reach a young audience, it's crucial to be present on the channels where young people engage daily. Spotify is an enormously important partner for us in this area: Through various podcast ad formats, we were able to drive real impact and strengthen our brand image among this cohort—demonstrating the potential ROI of a channel-focused media strategy tailored to a specific audience."

– Christoph Schmidt, Head of Brand Marketing LinkedIn DACH

Want to reach Gen Z consumers on Spotify?

Looking for something a little more custom let's talk..

👋 THE KNOWLEDGE : our weekly mix of the best news, analysis, and insider tips from across Music Ally's services. It's FREE, fun*, and every Friday . Plus receive a copy of the Sandbox Music Marketing Campaigns of the Year 2023 Report! Sign up here:

*actual levels of fun may vary

Music industry consultancy covering digital music marketing and strategy

Spotify reportedly developing tools for users to remix music

Share this:

• Click to share on Twitter (Opens in new window)
• Click to share on LinkedIn (Opens in new window)
• Click to share on Facebook (Opens in new window)
• Click to share on WhatsApp (Opens in new window)
• Click to email a link to a friend (Opens in new window)

If TikTok opened the era of fans speeding up and slowing down music tracks for their own purposes, Spotify may be about to accelerate it.

“The audio streaming company is developing tools that would allow subscribers to speed up, mash up and otherwise edit songs from their favorite artists,”  reported the Wall Street Journal  yesterday.

“It is a bet on the future of music consumption that Spotify hopes will deepen user engagement and appeal to young users, while generating new revenue for artists.”

The report went on to stress that rightsholders “would be compensated” when fans streamed those modified versions of tracks on Spotify.

The model being discussed would apparently see people deciding what speed they want to listen to a song and then saving that edit to “virtual collections” for repeat plays.

The WSJ also suggested that more advanced editing features might be restricted to Spotify’s upcoming ‘Supremium’ higher-priced subscription tier.

Tools : platforms to help you reach new audiences

Tools :: We Are Giant

With “fan communities” being on every artist’s team’s mind, we’re fans of the fact that…

Read all Tools >>

Stuart Dredge

Music Ally's Head of Insight More by Stuart Dredge

Latest News

WMG steps up its efforts in south Asia with new division

Warner Music Group has made its latest move in the…

Which artists count as Canadian? Spotify has some concerns…

Plans in Canada to require streaming services to promote Canadian…

PRS Foundation launches fund for early-career music promoters

When people worry about the closure of grassroots music venues,…

Music Ally’s music business news podcast covers the vital issues in detail, as they emerge. Listen now »

The latest and best jobs in the global music industry

See all jobs >>

Head of/Director of Production & Physical Supply Chain – Warp – London

Senior Social & Audience Manager – Blackstar – London

Digital Operations Manager – Beggars Group – London

Sandbox: your essential digital marketing guide – expert insight, case studies, fresh ideas, and overlooked opportunities.

Latest Sandbox

Behind The Single: Mitski – “My Love Mine All Mine”

Track: Mitski – “My Love Mine All Mine”Released: 15 September 2023Label:…

Behind The Campaign: Lankum

Originally formed as Lynched, contemporary Irish folk band Lankum released…

Country Profiles

Essential international guides, packed with data, interviews, strategies, and local insight.

Read country profiles >>

Country Profile – Netherlands 2024

Price increases among streaming services have boosted recorded music revenue in the Netherlands, with…

Country Profile – India 2024

Regional language music and the transition to paid streaming should fuel further growth in…

Country Profile – Taiwan 2024

Taiwan’s recorded music industry is booming, with streaming and physical music up and Mandopop…

What O.J. Simpson meant to Black America

Nearly 30 years later, O.J. Simpson’s arrest and murder trial in Los Angeles still evokes strong memories. There was the glove. The Bronco chase . The minute-by-minute national television coverage.

And, for many Americans, Simpson’s case will also be remembered for how it exposed the deep divisions between Black and White Americans.

The nation’s view of his 1995 acquittal for the murder of his ex-wife, Nicole Brown Simpson, and a friend, Ronald Goldman, largely cleaved along racial lines, though time has bridged some of the gap. Simpson died on April 10 at 76 years old .

Coming just a few years after the acquittal of four officers who beat Black motorist Rodney King in 1992 and the 1991 killing of Black teenager Latasha Harlins by a store clerk in Los Angeles, Simpson’s treatment by the police and media was viewed by many in the Black community as proof that even wealthy celebrities couldn’t escape racism in America, said Amilcar Shabazz, a professor of Afro-American Studies at the University Massachusetts at Amherst.

“When the verdict was reached we had one side of the screen with White people crestfallen and crying and then we had on the other side of the screen, Black people jumping up and down for joy,” said Shabazz.

Those racial divisions remain, he said. “It’s because we haven’t repaired the social fabric in a way that we like to pretend we have because we fall back on race and racism at the drop of a hat or a drop of the glove in this case,” Shabazz said.

While the reaction to the verdict was largely portrayed in the media along racial lines at the time, it was always more complicated than that, said James Lance Taylor, a politics professor at the University of San Francisco. “The truth is many millions of Black people thought O.J. Simpson was probably guilty,” said Taylor. “There was just so much wrapped up in the O.J. case that was connected to the Black experience in America.”

Twenty years after the verdict, a 2015 Washington Post-ABC News poll showed Black Americans were less likely to believe Simpson was guilty, compared to White Americans, though by 2007 the gap had started to narrow. In 1997, 31 percent of Black Americans said that they were “definitely” or “probably” sure of Simpson’s guilt. By 2015, that share had risen to 57 percent. In comparison, 83 percent of White Americans said Simpson was guilty in 2015, about the same share as had held that position in 1997.

Podcast episode

It’s not that Black people have changed their minds about Simpson’s innocence, Taylor said. “I think in the barbershops today, Black people are saying, ‘he got away with it, but the police got away with killing a lot more of us,’” said Taylor. “That’s the mentality.”

Taylor was living in Los Angeles at the time of the murders and said he remembers the day that Simpson led police on a car chase and how tens of thousands of people, including many White people, lined the streets and highways yelling, “Go, O.J., Go.”

But far before the trial, many Black Americans already felt that Simpson had turned his back on the Black community, Taylor said, noting that he reportedly liked to tell friends, “I’m not Black, I’m O.J.”

Local police prepared for riots if Simpson was convicted, Taylor said. “But Black people didn’t love O.J. like that. This wasn’t about O.J. the person,” he said. “O.J. was just an extension of the general polarization between Black America and law enforcement.”

“The sympathy for O.J. is not as deep as we think it is” in the Black community, Taylor said.

Kevin B. Blackistone, ESPN panelist and professor of the practice at the Philip Merrill College of Journalism at the University of Maryland, wrote in a 2016 Washington Post column, “Simpson didn’t transcend his race; he escaped it like it was a would-be tackler. He came from the black working-poor side of town, but his athleticism trumped that and landed him in an exclusive white university in Los Angeles.”

“Every Black celebrity knows that, whether they like it or not, they represent the entire Black community,” NBA legend Kareem Abdul-Jabbar said on X , the social media platform formerly known as Twitter, on Thursday. “Sadly, despite admirable accomplishments as an athlete, OJ Simpson was not able to live up to that responsibility.”

Rev. Amos Brown of San Francisco’s Third Baptist Church, a longtime friend of Eunice Simpson, Simpson’s mother, said it’s difficult for him to disentangle the football star’s crimes from the challenges he faced, including the ever-present threat of violence in his neighborhood growing up. “O.J. Simpson and far too many young Black males to this day have been met with attitudes and practices that define them as being less than human,” he said.

Simpson was introduced to a new audience in 2016 when two television series about the former running back captivated a generation too young to have known him as a Heisman Trophy winner and one of the most recognizable personalities in the country.

Phillip Lamarr Cunningham, an assistant professor of media studies at Wake Forest University, said many of his students view Simpson as a true-crime figure rather than the athlete he remembers.

Cunningham, who was a young man during the trial, said that he still struggles with the not guilty verdict. “Just like everybody else, I had to wrestle with the reality that he very well may have done it, alongside the fact that he is this Black man who had for all intents and purposes, made it,” Cunningham said.

Los Angeles was a “powder keg” at the time of Simpson’s trial, still reeling from the Rodney King acquittal and other racially divisive cases, said Marc Watts, who covered the Simpson trial for CNN and is currently the chief brand officer for the African American Leadership Forum.

“Many African Americans believed that O.J. Simpson was the revenge verdict,” Watts said. “It was the one Black people had won in response to some of the ones Black people had lost.”

For many Black people, the trial turned on the testimony of investigating detective Mark Fuhrman , who denied using a racial profanity on the witness stand, Watts said. Simpson’s defense team produced audiotapes of Fuhrman using the word multiple times and Fuhrman later pleaded no contest to committing perjury during the trial. He couldn’t be immediately reached for comment.

“That was the day I felt the jury, which was predominantly African American, pretty much bought the idea from the dream team that Fuhrman was a racist rogue White cop,” Watts said.

Watts says he will never forget the day of the verdict, Oct. 3, 1995, when he stood on risers outside of the Los Angeles courthouse and heard the roar of the crowd gathered outside with the media. When he arrived home that evening he watched news footage of joyous Black Americans and frustrated White Americans reacting to the verdict.

“It showed us even back then that our country was tragically racially polarized. And that is still true today,” Watts said.