Stakeholder Challenges

Spotify has quickly become one of the biggest forces within the music industry just in the few years it has been available to the public. It is the world’s biggest music subscription service, with over six million paying subscribers and twenty-four million active listeners. Despite their growing success, they have faced several challenges.

The first being that some of the most famous artist do not want their music to be streamed through Spotify. There are different reasons for this, some being that the payout they would receive would be less than that of CD sales or from radio play. Others think that it only supports established artists, rather than new, up and coming musicians. Another problem for the company is that the royalties paid to artists for their music is extremely costly. It is estimated that 70% of the profits earned by the company is spent paying the musicians. A suggested solution for this is to renegotiate with the artists in order to lower the costs behind streaming the music.

As with any other company, there will be competition within the industry, but it seems that there is a lot in the music business. Apple Music, Pandora, and YouTube are all music streaming sites that provide just about the same service as Spotify. However, they try to be a step above the rest by creating personalized playlists for each individual user. Spotify is also trying to be more innovative out of the fear of losing users from competition by proposing ideas of streaming Netflix-style videos. This also brings new logistical challenges simply because it is so unlike any other business and is a bit of a risk.



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