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Copy of Spotify Grooveshark Pandora

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Amy Broomfield

on 21 January 2013

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Transcript of Copy of Spotify Grooveshark Pandora

Grooveshark In the online music business 30209 - Management of Competition and Innovation in High Tech Prof. Boris Durisin Marcel Dammann 1631514
Andrea Scotto Di Fasano 1433671
Jonas Larsson 1631084
Pierfrancesco Leo 1406768
Gianluca Nicosia 1478189 First steps in the music streaming Changed music industry
New way of consume music
Technical innovations Napster 1999
Success, but sued by music labels Apple and iTunes in 2001
Not for free, but easy was to search & purchase music online
Supported by music labels - a way for them to revenue in this model. (instead of the increasing piracy) The start for something new.
Grooveshark, Pandora and Spotify. Now compare ... To find out the company who provide the best product, it has to be done in different stages.

Financial
Music Catalog
Discover new music
Free & Paid version
Design
Convenience & Accessibility

And finally an overall winner 2 Subscription plans Free
(with ADS) Fee-based
$36 /year 15/06/2011:Quoted on the New York Stock exchange BUSINESS MODEL: Consumer oriented music discovery service
Advertising comprised 88% of total revenue Highly Variable
Content Acquisition = 60% of total cost Music Royalties Pandora has to pay to music labels are often higher than the advertising revenue Pandora collects. Many transactions are money-loser. Pandora needs to increase the number of customers Strategy: work more directly with artists, convincing them to provide exclusive content to the site that Pandora hosts and sells to sponsors at premium rates. Turn Pandora into a platform for artists to communicate with fans more directly and extend their relationship to the real world. Requires an integrated multiplatform
including TV and the automobile. Once on those platforms, Pandora can offer even more advertising and sponsorship opportunities The biggest potential is in the car: Founded in Oukland
by Tim Westergren 2000: Music Genome Project
Objective: Codify people tastes into something predictable and formulaic They created 400 specifications for each song that is recorded to the listener's preferences to suggest other songs with similar characteristics Launch Pandora.com You pick a song Pandora creates a Music station based on your choice Learning from your preferences Finance Music Catalog COST STRUCTURE PROBLEM:

Quality vs Quantity Discover new music Both Grooveshark and Spotify has tools to share and find out new music but the winner of this category is Pandora - which whole Free & Paid version Design This dimension is the most individual, but since Grooveshark dont have its own platform, but instead are using the browsers they are a little bit behind. The positive thing with this is that you can access their service from all computer without downloading a program

For Spotify and Pandora it is a matter of taste. Bur they have more options then Grooveshark. The over all winner is:

Wide music catalog
Outstanding paid version
Great design
Economic sustainable solution

The future of the online music business:
continue to create innovative solutions
keeping up the growth rate.
(Revenue growt rate 458%, 2009-2010) For a music lover it is probably worth paying money for a good music service and then Spotify is a great choice. "The Most Important Man In Music"
Forbes,01-04-2012 All three companies have a free and paid version.
Spotify - the most strict free version and are the most expensive paid version, but also the one who give most additional value for paying users. (offline mode, best quality of songs, etc)
Grooveshark - no many extra features for their paying users except to get rid of the advertising.
Pandora - app for mobiles for free & the difference with the paid version are advertising and some limitation on how much you can use the service.











Paid version: Spotify is outstanding with the offline playlist mode.
Free version: Pandoras mobile app is great and Groovesharks is the best if there isn't expectetion of quality (but 22 million of track are free!). Spotify Pandora Advertising & fees from monthly subscriber Not successful
(Lawsuit by the 4 major music labels etc) Advertising (98%)
but the remaining 2% paying subscribers stands for 13% revenue. Paying Subscrider (15%) (But we are all different with different preferences and taste.) idea is for people to discover new music (Music Genome Project). From CD
to MP3 player Developed in Stockholm (Sweden) since 2006 2006: Launch in Sweden 1 year later 1 million members As of May 2012 Spotify is available in 15 countries: Austria, Belgium, Denmark, Faroe Islands, Finland, France, the Netherlands, Norway, Spain, Sweden, Switzerland, the United Kingdom, Germany, the United States, Australia and New Zealand Spotify offers access to 16 million different songs via computer, smart phone or iPad Think of iTunes and imagine all the songs in the store are actually in your very own library by Daniel EK and Martin Lorentzon Subscriptions Free Fee-based (accepting visual and radio-style ads) 4,99€ per month 9,99€ per month Subscription ratio this year: 15% expected to be 20% in a few years Extreme growth in revenue in this year: 458% Spotify beats iTunes if they continue with the current growth rate in two years from now
Spotify vs. Pandora vs. Grooveshark
GROOVESHARK was Founded in 2007
by Sam Tarantino and Josh Greenberg
Mission to create a legal competitor to networks like eMule, Limewire or other P2P service Number of albums and tracks available in their catalog. This seems to be the easiest feature to calculate.

Pandora - 800 000.
Spotify - 15 million.
Grooveshark - 22 million. Pandora has the opportunity to change the way people perceive radio much like DVRs changed the way people view their TV. Once users discover the ability to skip a song they don't like on Pandora while driving, the model could be permanently altered. the winner is ... “We are essentially trying to finish what Napster started, and bring all music in the world to everyone” (Sam & Josh in an early enterview) In the beginning Grooveshark was a music service, where users could browse and listen all the music stored on others’ computers without paying a penny, and if they wanted could also buy the songs INNOVATION Everyone in the value chain is rewarded, from users to copyright holders YOUR 99 CENT GROOVESHARK PURCHASE
revenue sharing model TODAY: 125 million registered users
36 million monthly active users In 2008, inspired by YouTube, a new version of Grooveshark was released and had a viral success. The site was redesigned and it was introduced an instant streaming web-based version of Grooveshark. Time Magazine has rated it as one of the 50 best web sites of 2010 a free internet Radio Today the company:
has 35 million registered users
streams 155 million songs a month Free Fee-based (accepting visual ads) 6€ a month Grooveshark is Based on a Freemium business model The service is provided free of charge, but a premium is charged for advanced features and functionality Grooveshark Plus (No Ads + customizable features) Grooveshark Anywhere (No Ads + mobile application) 9€ a month Let's see how it works
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