A Critical Research of Spotify’s Business Model—The Case of Discover Weekly

Abstract

Over the past few decades, the Internet and digital technologies have radically transformed the way in which music is distributed, sold, licensed, and consumed. Against this context, one of the most prominent industry players, Spotify, has received increasing attention from scholars. Despite its multifaceted role as a cultural intermediary and a gatekeeper, this study primarily frames Spotify as a DSP (Digital Service Provider). The purpose is to explore the dynamics of its business model innovation from a value perspective. Building on a systematic literature review, therefore, it argues that Spotify constructs its value streams mainly around the personalized curation of users’ listening experiences. Specific attention is paid to its freemium subscription model and its algorithmically filtered playlist called "Discover Weekly." Finally, the findings demonstrate that Spotify's business model innovation is an iterative, cumulative and incremental process through which its focus on the personalization strategies could be conceived as a core competency.