All the Music, All the Time

G1 : Team 3
Sikha Bagaria | Malay Gala | Piotr Kanonowicz | Goh Hao Xuan Bernard | Joash Yeo ZhongJie



1
Prepared for Bala Shankar

MKTG 204 - Services Marketing

AY 2013-14
A marketing approach to Music Streaming Services & Spotify
Overview
The Music Market: at a Glance 3
Digital Music 3
Streaming Music 4
Spotify: The answer to the digital music streaming 4
Industry & Company Analyses 4
Strengths, Weaknesses, Opportunities and Threats: 4
Porters Five Forces 6
Spotifys Service Blueprint 8
Service Recovery Policies 9
Spotify Service Standards 9
Analysis of Findings 11
Service Gaps 11
Hard and soft customer dened standards 13
Recommendations 16
Better communicating the way Spotify pays artists 16
A Better Pricing Strategy for Music Lovers 17
Growth Strategies 19
Audiobooks-on-demand 19
Education-on-demand 19
In Closing 21
References 22
Appendices 23
Appendix A: Consumer Survey Question Set 23
2
The Music Market: at a Glance
There has been a huge transition in the music market, from physical music in
the form of CDs to downloading songs into MP3 players to, now, very widely
adapted, streaming. The sales of physical music in the form of CDs have been
plunging over the last decade. As of 2012, the physical music market lost nearly a
third of its volume (IFPI 2013:
7). Studies have also shown
that downloads have also
been decreasing yearly. So far
this year, 1.01 billion track
downloads have been sold in
the United States, down 4%
from the same time last year,
according to the tracking
service Nielsen SoundScan.
Digital Music
The market share of digital
music has risen by 22 percent
(US$ 4.2 bn) in 2008 to 57 percent
(US$ 5.8 bn) in 2012. Figure 1 gives us a clearer picture of how the digital market
has been taking over the phonographic industry. The parts of the bars which are
highlighted in red denote the
percentage sales of digital music in
the phonographic industry.
Figure 2 reveals that music
listeners have decreased music
downloads. Thus, downloads do
not contribute much to the revenue
of digital music, and streaming has
taken over. Streaming services
has grown by 62 percent from
2011 to 2012 according to the
current IFPI report (2013: 24).


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Figure 1: Recorded music sales(CD, Digital, Vinyl) in the US (2000-2012)
Source : Recording Industry Association of America
Figure 2: Yearly change in online music revenue by type
Source : Strategy Analytics Global Recorded Music Forecast 2012
Streaming Music
Last year, streaming and subscription services generated $1.03 billion in
revenue, up 59 percent from the year before, according to the Recording Industry
Association of America, and many of these providers are reporting robust growth
this year.
From Figure 3 we can see
that the sales share of
subscription and streaming
services in the digital music
market was 25.5 percent in 2012.
Music streaming services have
thus, started playing a more
important and crucial role in the
music industry. It is now
responsible for the changing
industry environment.

Spotify: The answer to the digital music streaming
Spotify is an online digital music streaming service that promises users
access to their favorite music on all their digital devices. It claims to be the rst
social digital music experience, with a deep integration with Facebook, which users
can use to share their favorite songs and playlists with their friends.
Spotify was founded by 28-year-old Daniel Ek in 2008 and currently boasts 24
million active users and 6 million paying subscribers. It also carries a database of
24 million songs with 20,000 songs added every day. Spotify is currently available in
32 countries.
In the online music streaming service industry, Spotifys closest competitors include
Pandora, Beatport, SoundCloud and Rdio.
Industry & Company Analyses
Strengths, Weaknesses, Opportunities and Threats:
Strengths:
1. As evidence of its technological prowess, Spotify boasts a superior user
experience, based on a user-friendly interface, available on both online and oMine
platforms.
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Figure 3: Streaming music sales in the US (2000-2012)
Source : Recording Industry Association of America
2. Spotify also uses streaming advertising as a revenue source, just like
YouTube. Advertisements are placed before the actual streaming of songs begins.
Revenue from this source is shared between Spotify and the artists who choose to
upload their music to the site.
3. As opposed to downloading music using online torrents or le-sharing
websites, enjoying music on Spotify is a completely legal process. Users can also
enjoy music without having to download the les onto their devices.
4. A deep integration with Facebook and the ability to share music extended
to users provides Spotify with essential advantages over competition and helps it
make digital music a social experience.
Weaknesses:
1. Spotifys low royalty rates discourage artists from uploading their music to
the site. In the UK, on average, Spotifys royalty rates award about 0.4p to an artist
for every play of their song on the site. At this rate, it would take 250 plays of a
single song to earn the artist a sum of 1. In contrast, the iTunes Store awards
artists 10 cents for every download of a 99 cent song, which means the song need
only be downloaded 10 times to earn the artist a sum of $1. Consequently, the
Spotify music library is quite limited with respect to popular artists.
Opportunities:
1. Higher internet connection speeds worldwide encouraged the shifting
trend from downloading to streaming videos and movies online. This trend opens a
new avenue for people who like to enjoy their content online, without having to
download it. Following online video streaming, the streaming of music online is a
paradigm-shift in the way people enjoy music and has opened a lucrative, quickly
growing market for online streaming services.
2.The advent of smart devices like smartphones and tablets has also
encouraged the proliferation of applications (or apps), versus the previously used
software programs. Apps feature shorter download times and easier usability to
people with smart devices, along with easy access to the internet and
simultaneously running multimedia apps.
Threats:
1. Competition from other streaming services like Beatport, SoundCloud and
Rdio is a major source of competition for Spotify, as they all operate in the same
industry. The diferentiation of service design and delivery is the only way to gain a
competitive advantage and as such, a limited music library could be a huge liability.
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The iTunes Store, due to the vast popularity if iOS devices, is also a huge
competitor, albeit in a slightly diferent space.
2. The greatest challenge for players in this industry is to attempt to function
as a protable business whilst trying to fulll the needs of consumers who hitherto
have been accustomed to downloading and enjoying music for free or from trusted
sources like the iTunes Store.
Porters Five Forces
Competitive Landscape:
As an online music streaming website, Spotify faces erce competition from
other services in the same space such as Beatport, SoundCloud and Rdio. Spotify
is currently a leader in this particular market, but its position as leader might be in
jeopardy, given the limited nature of its music library. In this particular industry, it
would seem that the service that provides the best royalty rates for contributing
artists will have the best library, and thus have a competitive advantage over the
others.
The iTunes Store, due to its vastly popular and pervasive nature, also poses a
form of competition by providing easy and legal downloads of digital music to most
laptops and smart devices.
Bargaining Power of Suppliers:
In the context of an online music streaming service, the major suppliers for
Spotify are the contributing artists who choose to upload their albums to the
website and earn revenue through it. World-famous artists and music icons vastly
inuence the collection of music available online. Whilst Spotify is a great place for
new and emerging artists for promoting their music, established and popular artists
indirectly inuence the service delivery by choosing whether or not to upload their
music.
Bargaining Power of Buyers:
Spotifys customers are people who listen to music on their laptops and/or
smart devices, with an internet connection. The key challenge of operating in the
industry of online music streaming service industry is to function as a sustainable
and protable business model while catering to consumers who were previously
accustomed to acquiring their digital music through free, albeit illegal means. While
the legality of Spotify is attractive, whether or not a vast majority of consumers will
agree to pay money for streaming music online is still questionable.

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Threat of New Entrants:
By virtue of functioning online, Spotify and similar services have the
advantage of being accessible anywhere, as long as an internet connection is
available. The downside of being an internet organization is that the low barriers to
entry might allow new entrants to set up in the same space quickly and cheaply.
The advent of the world wide web makes e-commerce businesses easy and
afordable to set up and run, and anyone with a unique business idea and web-
designing skills can set up in any industry.
Threat of New Entrants:
As Spotify and other online music streaming services are the latest
phenomenon in the way we enjoy digital music, there is little threat to be expected
from any other products that function on a lower standard of technology. While
competition from the iTunes Store still remains, it is unlikely that any other products
will pose a threat to Spotify and its competitors unless they are built on a more
futuristic technology. Even among its competitors, Spotifys easy and familiar
interface gives it a decided advantage.

Spotifys Service Blueprint

The blueprint of the service is based on our personal interaction with the
service and research on the companys processes. We found that there is minimal
physical evidence for this application and the only physical evidence is the smart
device that the listener uses to access and use Spotify.
Users can download the application; purchase a premium account as well as
a voucher. These are the actions that the users are expected to carry out in order to
experience this service. Spotify says that above 20% of its users purchase the
premium account.
Spotify has various backstage department personnel who help to maintain
the website and service it. They also have customer service personnel who reply to
customer queries and concerns promptly. The application development team are
constantly adding new songs into the spotify database for listeners and enhancing
their user experience.
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Figure 4: Service Blueprint of Spotify
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Service Recovery Policies
Spotifys recovery standards have 3 segments. First, if users are unsure of
their problem or are encountering a trivial problem, they can look through the highly
extensive FAQ sheet on the spotify website. This is where users can nd answers
for all of their questions. It is easy for users to navigate through the FAQ site as the
questions have been grouped according to the type of problem. For example, there
is a tab for problems relating to logging into spotify. This tab specically deals with
only this problem. This is quite a simple way for users to understand the issue and
solve their problems.
However, if a user still has problems with service they can contact the
customer support personnel via email who promptly respond to all questions and
complains regarding the service.
Just like every internet service, Spotify sometimes needs system
maintenance. During the maintenance period, the server could be disrupted causing
users inconvenience and problems. To address these issues, spotify uses social
media to announce problems with service as well as the status of the solution. They
actively engage their users. For instance, they provide real time information to their
users via twitter status updates that allow users to identify whether the issue is with
their equipment or with service provider.
Spotify Service Standards
Music streaming has recently entered the digital market and there are no xed
standards that these services should follow. However, we feel that there are some
common grounds which are used in comparing these service standards.
Price
The pricing of the service should be afordable and priced reasonably with respect
to the purchased music such as the Google Play & iTunes Stores.
Accessibility
This service should be accessible on multiple devices, for example desktop and
mobiles. Thus, allowing this service to be convenient to use. The service should
also be compatible with the diferent operating systems such as iOS, Android, Mac
and PC.
Catalogue of music
The number of tracks and the database is essential in this service industry.
Streaming services should have a decent variety of music from various genres. The
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song database should be constantly updated with new releases and should also
have a section for old classics.
Local Artist
Services should understand the likes of the users. Music streaming services should
have songs from local artists to cater to the needs of the individual markets.
Connectivity to server
It is very important for a streaming site to have a good connectivity with various
servers. It should work well with broadband and 3G servers.

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Analysis of Findings
From our ndings, we have identied several interesting and key points that
seek to explain the needs of people who are listening to music streaming services.
With our methodologies in conducting the survey, only 52 responses were validated
according to the scope of our research and were considered in our analysis. We
have categorized our analysis in two broad categories:
A. Service Gaps
B. Hard and Soft service customer dened standards for music streaming
services.
A. Service Gaps
We sought to identify the diferent service gaps that users were currently dissatised
with in Spotify.
Listening Gap
The results from our survey have shown that a large proportion of the
respondents (average of 51.4%, with mean of choice options = 3.34 Figure 6) were
largely neutral and indiferent on being satised with the listening channels that
Spotify ofers. This highlights the fact that while Spotify has existent levels of
listening channels to cater to its users, many do not show a particular interest in
using channels. Streamers were either ignorant of such existing channels provided
or show no signicant concern to be part of it.
Figure 6: Survey responses depicting respondents satisfaction towards Spotifys listening channels.
Hence, to maintain its competitive advantage and edge in such a competitive
industry, Spotify needs to continually garner feedback from its community to cater
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to the changing needs. We can therefore deduce that there is a strong need to
emphasize its dedication as a music service that values feedback, either through
making its current feedback channels more evident to current users or creating
additional channels to solicit feedback.
Service Design Gap
With a fth of our respondents indicating their dissatisfaction in Spotifys
service design, we need to re-look at some service design attributes that would
create a seamless and pleasant user experience. As our ndings have listed the
levels of satisfaction among users towards Spotifys service design, it is critical to
improve the platform to make it more seamless and easier for users to transfer
songs to their own personal playlist. A fully integrated platform that allows one to
search and share songs with ease would be the basic essentials of any audiophile
that streams music.
In addition, Spotify should also seek to incorporate more user exibility in its
current platform, creating a more personalized music experience for users.
Flexibility for example, includes the ability to adjust audio equalizer (EQ) (treble,
mids, bass levels) of the song. A successful example of this would be the iTunes
player, where the user can choose between pre-loaded presets of audio EQ or
manually adjust them. This is a crucial factor for any serious music listeners, as
some would prefer having more bass to their songs, providing the deeper feel while
some might go high on the trebles to bring out the clarity and sharpness of the
song.
Service Delivery Gap
The top two attributes that users found most dissatisfying the workability of
application buttons and ease of syncing playlists between digital devices clearly
suggests that Spotify could improve on these tangibles to deliver its services
efectively and close its delivery gap. Any modern application on PC/Mac that does
not function fails to fulll its basic existence on the purpose it was created for.
Having faulty in-app buttons will only cause to ruin the listening experience of any
media player and would result in users switching to a competitor.
With Apples innovation and application of the easy syncing of songs
between iTunes and their iPods, it has inuenced many music lovers and created a
need in them for seamless song syncing across music devices. Hence, Spotify
should not lag behind but must cater efectively to users in this aspect, to close its
service delivery gap.

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Communication Gap
One key point that should be highlighted in Spotifys communication channel
is that nearly 12% of the respondents were highly dissatised with the lack of
explanation in the manner of how music artists are paid by Spotify. While this might
not be a concern in terms of getting users to subscribe to its premium service,
Spotify should nonetheless address such issues, to inculcate a sense of assurance
(a quality indicator) to its listening community. Users want clear and transparent
explanations on how artists are getting their royalties from Spotify, so that they can
better understand how the service works.
In addition, about 10% of the respondents mentioned that they were
dissatised in the aspect where the communication of the diference between
Spotifys free and premium services was not clear. Consisting of the main bulk of
Spotifys revenues, the ultimate existence of the premium service seeks to convert
as many users from its free service to paying for its premium service. This is a
crucial communication aspect that Spotify can seek to improve. Should Spotify not
communicate the diferences clearly, it would lead to many users sticking with its
free service. This would then pose as a potential loss of revenue from users who are
unable to diferentiate the benets and therefore would not switch to using Spotifys
premium services.

B. Hard and soft customer defined standards

From our ndings, we were able to exact hard and soft customer-dened
standards that they would minimally expect to pay for a music streaming service.
Song Quality
When asked to select the minimum standards of song quality required for
music streaming that they would pay for, a third of the music streamers were
unaware of such industry standards, another third expressed that they desired the
normal bit rate quality while the remaining third desired the highest bit rate quality. It
can be deducted that music streamers were not at all interested in having the
lowest bit rate quality of music (e.g. 96kbps).

A striking 96% of our respondents however, expressed decent levels of
satisfaction with Spotifys music quality. Spotify currently ofers three music qualities
for users to choose from (see Table 1). It rstly caters to users who have low
bandwidths, as such streaming lower bitrate qualities would sumce for them. It also
caters to users who have decent bandwidths, ofering them the choice to switch
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between bitrates depending on their connection speed.
Table 1: Three standards in music quality measured by kilobits per second (KBPS)

Spotify should remove its low bitrate quality streaming services, as there is
no signicant demand or interest and should instead focus on providing higher
quality streams to music streamers.
Compatibility
91% of our respondents indicated that a streaming music service must at
least operate on the PC/Mac operating system, with 78% also indicating that it
must at least work on a smartphone. This clearly shows that users of music
streaming services have a strong need in a media platform that is capable of
streaming music across their personal devices (laptop, tablet and smart phone).
Once again, we see an increasing trend of music streamers wanting the exibility in
listening to music streams wherever they are.
Currently, the free service of Spotify works only across the PC/Mac operating
systems while the premium service of Spotify gives you the added advantage of
streaming music across phones and tablets, increasing mobility and exibility.
Hence, we can see that Spotify has successfully managed to integrate its player
across multiple platforms and has met expectations of the music streamers.
Social & Payment Connectivity
With an increasing trend of people turning to social media platforms for
instant sharing of photos, songs and videos, 64% of our respondents preferred
using Facebook as a medium to share their current songs and playlists with their
friends. This can be contrasted with other social platforms, with 16% preferring
connecting via Twitter and only 14% connecting via Google Plus. Spotify is built on
social connectivity, relying on users to share new song and album releases.
Currently it incorporates Facebook, Twitter and Tumblr sharing in its media platform,
surpassing standards that music streamers minimally expect.
As seen in our ndings, our respondents were keen on using Paypal to pay
for premium services because they were more familiar and comfortable in such a
payment method. Spotify ofers not only payment through Paypal, but also through
credit/debit cards, Facebook, Boku mobile and online ecard payments for users.
This increases the exibility to which users can easily choose their preferred method
of payment.
Lowest bitrate quality
(96kbps)
Normal mp3 bitrate quality
(160kbps)
Highest bitrate quality
(320kbps)
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Payment Plans
According to the responses, 64% of the music streamers clearly indicated
that they would very much prefer a at rate per month method of premium
subscription. A at rate per month refers to paying a at fee of $10 for an unlimited
choice and play of songs on Spotifys premium service. However, about a third of
the respondents were more inclined towards a selective rate of subscription. An
example of this is where users would pay 10 cents for the newest song release, and
1 cent for a normal song catalogue. This caters to streamers who prefer only
listening to selected songs and would not pay for the entire catalogue of songs
available. Spotify, however only ofers the at rate per month and would thus need
to incorporate a more exible method of subscriptions for music streaming users.
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Recommendations
In consideration of our ndings of local market sentiments and market
trends, we suggest two improvements Spotify can make: one to its communication
policy to increase consumer satisfaction towards the service, another to its pricing
strategy to maximize revenue without compromising its main service promise to
deliver all the music, all the time.
Better communicating the way Spotify pays artists
Spotifys treatment towards its artists, the sole suppliers of the content
behind its service, has been at the center of controversy in the world of digital
music. Managing royalties paid to artists is a chronic and non-unique challenge for
music streaming companies. Having competitive advantage with superior
technology is secondary to having ownership of music rights, a fact that compels
such companies to put the needs of its artists at the top priority. Furthermore,
artists have a sizable inuence over their target consumers, as evident of PR stunts
such as Pink Floyds dispute with Pandora (USA Today, 2013) and Thom Yorkes
(Radiohead) with Spotify (Business Insider, 2013). Artists easily leverage on their
celebrity status to impose bad impressions of music streaming on their less
discerning fans, resulting in the popular negative associations consumers make to
music streaming brands, such as exploiting royalties and ripping of artists.
We recommend a communication strategy that is reminiscent of McDonalds
Open Doors policy to manage poor public opinion of its food. Currently, Spotify
maintains a section of Artists Services on their support page, in which they provide
vague numbers on overall artist compensations and payment policies such as
$500m paid to artists in 2012 and 2% of our gross royalties for an artist whose
music represents approximately 2% of what our users stream.
Spotify needs to aim for greater transparency. By regularly publishing
statistics of royalties paid out to artists in a precise and honest manner, the service
can then efectively highlight the benets of this relationship Spotify has with artists.
On top of that, these numbers need to reach consumers in an efective manner.
Interesting messages such as Top 10 Streamed Artists and Breakthrough Artist
of the Month accompanying royalty numbers are attention-grabbing and of interest
to customers. Aside from paying of popular artists from streaming, the service
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should ideally include growing artists to highlight the versatility of the service. From
releasing the total sum paid for streaming Adeles Grammy-winning 21 album to
publishing the stream counts for new artists like The Lumineers promote their debut
self-titled album, users are continually reminded that their decision to purchase the
service is a legal alternative that has a tangible benets to the artists they enjoy.

A Better Pricing
Strategy for
Music Lovers
Our study revealed
that there are
customers who are
also interested in
paying a selective rate if it could mean gaining access to the newest songs on the
same day of their release. Here we see an opportunity to monetize these needs.
An economical solution we considered was the introduction of structured
price plans. This will be done by categorizing the service catalogue according to
genres, then progressively charging users based on the number of catalogues they
want access to the service. This potentially limits the users access to the full
catalogue, in turn diminishing Spotifys value as a service for people to discover
music. Segregating the catalogue is not only a tedious endeavor but also a very
risky one, in the danger of alienating its loyal following of customers.
Table 2: Proposed two monthly add-ons to Spotifys Free & Premium options.


Free Premium
Fresh
Access
Live
Price/
month
S$0 S$9.90 + $3 + $4
Access to
catalogue
Unlimited,
with ads
Unlimited
Newest hits
one week in
advance
Videos,
commentary,
demo
recordings
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Our team suggests something feasible: paid monthly add-ons that build on
the consumers Spotify experience. Lets keep the at $10 rate so users get access
to a rich back catalogue of classics, greatest hits, past songs.
Lets introduce small paid options for the user to choose from, such as Fresh
Access, an additional $3 a month add-on catered to the music lovers, which gives
them access the newest same-day releases. Such new releases would be available
to other users 1-2 weeks after release.
Or to appeal to hardcore fans who follow artists beyond the content they
release, another add-in option, Live, could give users access music videos,
commentary by artists on their albums and process, studio demo recordings. The
small additional commitment from each consumer gives them an added benet to
their experience. At the same time, with more monetary incentive for more content,
the service is better able to persuade artists to release new content onto streaming.
We believe introducing add-ons to Spotifys pricing model is the most
efective way to distinguish between both the Audiophiles and Explorers for better
revenue, without compromising the companys service promise to deliver a world of
music to the consumers.

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Fresh Access users can gain a rst listen to albums such as Lady GaGas 2013 ARTPOP album.
The album would then be made available to other users 3-4 weeks later.
Growth Strategies
With knowledge from current trends and our ndings, weve identied two
ways for Spotify to take advantage of its superior streaming technology to two new
product categories: audiobooks and digital education.
Audiobooks-on-demand
In the US, a 2011 study by Audio Publishers Association conducted,
42% of recent audiobook buyers surveyed report are interested in
streaming audio, from vendors such as Spotify and Pandora.
We predict this is the most likely extension that Spotify will implement in
its service, for two reasons:
1. Potential new customers. The results of the sales survey showed unit
sales of audiobooks in 2011 were up 13% since 2010. The estimated size of the
audiobook industry in 2011 was $1.2 billion and is set to grow. This requires the
streaming technology that Spotify has, but the company has been only focused on
music streaming. We believe a gradual roll out of titles onto the service, coupled
with a possible add-on for those who want audiobooks, could greatly boost
earnings for the service.
2. We estimate very minimal costs to incorporate audiobooks into their
infrastructure, since the most signicant additional cost to Spotify would be extra
servers to accommodate the audiobooks.
Education-on-demand
In the growing digital education
market, we have publishing giants like
Pearson and McGraw-Hill relying more on
digital publishing for their education needs.
We think Spotifys Applications feature is a
suitable tool to add value to digital education
publishing, by ofering audio course
streaming on-demand.



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Applications is a feature on Spotify, which target very specic needs of
consumers, such as a platform for fans to better interacting with specic artists. It
even allows customers to explore the collections of renowned lists, such as the
Rolling Stone 100 greatest guitarists of all time. Rolling Stone magazine cites the
Spotify app as a perfect complement to their print material, helping readers to
interact with their material the way music journalism should have in the rst place.
We predict that Spotify will engage with education publishers to ofer
separate education streaming services that will potentially disrupt or inuence
leading names in digital education services such as iTunes U and Khan Academy.

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In Closing
Weve looked closely at music streaming as a service industry with high
potential growth in the next ve years, took a leading example in this market and
analyzed its service constructs. Spotifys unique service design that leverages on
minimal physical evidence and responsive customer service and interaction,
Weve studied local users of streaming services and found out the standards
that they expect from a service, such as streaming quality, payment connectivity
and user-friendliness of its UI, Weve found out that the most pertinent gaps in
service that customers nd in Spotify are its deciency in communicating how the
service pays artists, because customers view the service as an important legal
alternative to music piracy,
We identied two segments of the market at its stages of infancy, the music
audiophiles and music explorers, and we believe the segments will change over the
years as its players grow and innovate. In response to these two segments, weve
recommended adopting add-ons as a pricing strategy to maximize revenue from the
service without compromising values.
Looking at plausible growth opportunities of the service, weve talked about
audiobooks and education-on demand as possible avenues of growth for the
company.
Spotifys service is built upon a solid foundation of superior streaming
technology that is matched by few, establishing itself as one of the leading pioneers
of music streaming today, albeit a few gaps in service which the company can
easily address. Above all, the companys biggest challenge is still striking a balance
between customer and artist satisfaction; without either, the companys business
model will fail. This is a company with essentially no tangible product nor physical
evidence, yet has managed to bring to customers a new denition of discovering
music. As long as the company continues to expand its catalogue of music,
appealing to every taste and genre, the service will be a formidable disruption to the
music industry and a major inuence on the way we consume music.
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Spotify, ed. Mark Townsend, Publication 20 July 2013, Accessed 11 November
2013.
Sisario, Ben, The New York Times, As Music Streaming Grows, Royalties Slow to a
Trickle, ed. Ben Sisario, Publication 28 January 2013, Accessed 11 November 2013.
Sisario, Ben, The New York Times, As Downloads Dip, Music Executives Cast a
Wary Eye on Streaming Services, ed. Ben Sisario, Publication 20 October 2013,
Accessed 11 November 2013.
Tschmuck, Peter, Music Business Research , Is streaming the next big thing? an
international market analysis, Publication 4 June 2013, Accessed 11 November
2013.

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Appendices
Appendix A: Consumer Survey Question Set
1) Choose which music listener prole suits you the best at the present moment:
- I use only Music streaming services (Soundhound, iTunes Radio, Spotify, Beatport
etc...) for all my music needs
- I only purchase/download digital music (iTunes, Windows Player, Amazon Music,
Google play etc..) for all my music needs
- I use BOTH music streaming services and purchase digital music (e.g. I currently
use Soundcloud and purchase iTunes music)
- I do not listen to music in digital formats at all

2) Could you specify if you've paid for any music streaming services at any point of
time, or are still paying for one?
- Yes, and I am still paying for a streaming service at the moment
- Yes, I used to pay for it, but no longer
- No, Ive only used streaming services which are free

3) Check the music streaming service that you recognize.
- Sound Cloud
- iTunes radio
- Beatport
- Spotify
- 8tracks

4) Check the music service youve used or are currently using.
- Sound Cloud
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- iTunes radio
- Beatport
- Spotify
- 8tracks

5) Indicate your usage intensity as a user of Music Streaming services you've
indicated of using.
Frequency:
Light: 1-2 times a fortnight
Medium: 3-4 times a week
Heavy: 5-6 times a week
Habitual: Everyday

6) Please indicate the devices in which you use Music Streaming Services.
To clarify,
Local app: Accessing the service using an application installed on your computer.
Web app: Accessing the service using a web browser such as Chrome or Safari.
- PC/Mac (Local App)
- PC/Mac (Web App)
- Smartphone
- Tablet

7) Please indicate the device(s) in which you consume your digital music.
- PC/Mac
- Smartphone
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- Tablet
- Other

8) Listening Channels (rate 1-5, 1 Very Dissatised, 5 Very Satised)
- Avenues for providing feedback to Spotify
- Avenues for Spotify community support (discussion forums, customer support)
- Availability to send bug and crash reports when apps do not work
- Avenues to suggest artists/songs to make available on service

9) Service Design Channels (rate 1-5, 1 Very Dissatised, 5 Very Satised)
- Ease of navigating with Spotify
- Ease of searching songs
- Ease of following other users playlist
- Ease of transferring songs to personal playlist/library
- Aesthetically pleasant
- Functions (Discover, Top Hits, Radio)
- Flexibility (e.g. adjusting audio EQ)
- Interactivity with Facebook Friends (sharing playlists, sending songs)

10) Service Delivery Channels (rate 1-5, 1 Very Dissatised, 5 Very Satised)
- Compatibility with operating system
- Streaming connectivity
- Music Quality
- Workability of application buttons and tabs
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- Ease of syncing playlists between digital devices

11) Communication Channels (rate 1-5, 1 Very Dissatised, 5 Very Satised)
- Advertises exactly what the service does
- Clearly communicates the diference between its free and paid services
- Timeliness of notications about new updates of the service
- Explains how artists are paid by Spotify

12) Visualize yourself using Spotifyas a complement to yourpurchased digital
music.

Please rank the importance of each service attribute to your decision to use Spotify
as a complement to your digital music.You can drag and drop the following
attributes.
1 being the attribute most important to you,
6 being the least important attribute.
- Price
- Accessibility
- Catalogue of Music
- Has local artists
- Connectivity to music server
- OMine Listening

13) Visualize yourself consideringusing Spotify to satisfy all your listening needs.

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Please rank the importance of each service attribute to your decision tosolely rely
on Spotify for your listening needs. You can drag and drop the following
attributes.
1 being the attribute most important to you,
6 being the least important attribute.
- Price
- Accessibility
- Catalogue of Music
- Has local artists
- Connectivity to music server
- OMine Listening

14) Are you familiar with what Music Streaming services can ofer you?
- Yes
- No

15) Are you considering using Music Streaming services in the future?
- Yes
- No

16) Visualize yourself considering to TRY using music streaming service for your
listening needs.
Please rank the importance of each service attribute to your decision to TRY music
streaming services.
1 being the attribute most important to you,
6 being the least important attribute.
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- Price
- Accessibility
- Catalogue of Music
- Has local artists
- Connectivity to music server
- OMine Listening

17) Visualize yourself considering to switch entirely to using music streaming
service for your listening needs, without relying on for purchasing digital music.
Please rank the importance of each service attribute to your decision toswitch
entirely tomusic streaming services.
1 being the attribute most important to you,
6 being the least important attribute.
- Price
- Accessibility
- Catalogue of Music
- Has local artists
- Connectivity to music server
- OMine Listening

18) Could you share a simple reason why Music Streaming service does not appeal
to you?

19) Age
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20) Monthly Income
21) Employment

22) Minimum standards that you would require of a music streaming service that
you would pay for:
Song quality:
- at least 96 kbps, 160kbps, 320 kbps, not aware
Social & Payment connectivity
- Facebook, Google+, Paypal, Twitter, Not sure
Payment Plan:
- Flat Rate, Progressive Rate, Selective Rate
Service must work at least on these devices:
- Personal Computer
- Smartphone
- Tablet
- Not sure

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