Danielle de Ferrari Sarah de Ferrari Source: Spotify Source: - PowerPoint PPT Presentation

Bryce Simantel Christine Osazuwa Danielle de Ferrari Sarah de Ferrari

Source: Spotify

Source: Spotify, 2014

Source: Mashable, 2013

� Source: Spotify, 2013

WEAKNESSES STRENGTHS • High frequency in audio & visual • Supports the music industry advertising • Re-growing the industry • Subscription fee above industry • Ease of use standard • Available songs • 70% of Revenue to Royalties • Offline listening • Artist relationships • Giving record labels equity OPPORTUNITY THREATS • Global Expansion • Pirated music • Combat Piracy • Cannibalizing consumers • More robust free option • Losing record label support • Offline music related projects • Losing artist support • Paying more artists directly • Prolonged sustainability • Legislation

Threat of New Entrants Bargaining Industry Bargaining Power of Rivalry Power of Buyers Suppliers Threat of Substitutes

2013 Physical Format Sales Down 12.3% in US Digital source sales grew by 7.6% Source: Billboard, 2014

Source: RIAA, 2014

Source: Nielsen, 2013

Hear favorite songs Available on device Easy to use Create radio stations Wider selection Ability to skip songs 38% 40% 42% 44% 46% 48% 50% 52% Source: Edison Research, 2013

Eliminate Reduce • Limited number of skips • Advertisements • Need for internet access to use • Undesirable or unwanted music service • Buffering times for songs • Listening hour limitations Raise Create • Sound quality (especially on • Ability to generate playlists mobile) • On-demand song choices • The catalogue of accessible • Ability to rewind and fast- music forward music • Social network integration

10 10 10 9 9 9 8 8 7 7 7 7 6 6 6 6 5 5 4 4 4 3 3 3 2 0 0 PRICE USER BASE PLATFORMS CATALOGUE ON-DEMAND UNLIMITED SOCIAL MEDIA SOUND QUALITY OFFLINE ACCESS MUSIC ACCESS INTEGRATION Spotify Pandora iHeartRadio

Purchase Delivery Use Support Maintenance Disposal Customer Productivity ♪ Simplicity Convenience Risk Fun & Image Environmental Friendliness

Purchase Delivery Use Support Maintenance Disposal Customer Productivity Simplicity ♪ ♪ Convenience Risk ♪ Fun & Image Environmental Friendliness

Unique to Common to the Industry the Industry Catalogue Price On-demand Unlimited Access User base Social Media Integration Sound Quality Supported Platforms Offline capabilities

Maintain Artist & Label Buy In Generate additional revenue streams Incentivize advertisers Achieve “Lifestyle Brand” Status

Source: Next Big Sound, 2012  Generate additional revenue streams  Maintain Artist & Label Buy In

Source: Business Standard, 2014  Incentive Advertisers

Music streamers are 50% more likely to be heavy spenders on event tickets. Source: Nielsen, 2013  Generate additional revenue streams  Achieve “Lifestyle Brand” Status

Of the 12% of musicians who earn any income from merch sales, it makes up 16% of their total average income. Source: Future of Music, 2012  Generate additional revenue streams  Maintain Artist & Label Buy In

Sean Parker’s “Hipster International” playlist is attributed to pop singer, Lorde’s breakout success. Source: Forbes, 2013  Achieve “Lifestyle Brand” Status

Spotify Premium Royalties Are 10 Times Greater Than Free, Ad-Supported Royalties Source: Digital Music News, 2013  Maintain Artist & Label Buy In

Global mobile music revenue is predicted to rise by 1.5% through 2018, driven by countries such as Nigeria (21%), Malaysia (10%) and China (8.5%). Source: PWC, 2013  Additional revenue streams  Achieve “Lifestyle Brand” Status