How Spotify Can Benefit From Guiding the Listener Into the Long Tail of Niche Artists Through Music Discovery

Teit Listoft Løngreen

Student thesis: Master thesis

Abstract

This master’s thesis investigates how Spotify’s music recommendation and features can help the niche artist getting more exposure, but also benefits Spotify in return. The theoretical framework for understanding the structure and capabilities of Spotify are provided by Chris Anderson’s filters in order to sort through the supply of music, and understand the convenience with Barry Schwarts’ “the paradox of choice”. Through the examination of these capabilities is primarily focused towards Spotify Discover Weekly, but also Spotify’s data-analytic tools through Spotify for Artists, and the playlist among others.
After the valuation of Spotify’s features and capabilities it is analyzed if Spotify can keep their market leader position in a highly competitive market place. In Jay Barney’s resource-based view it is analyzed if Spotify is able to have a competitive advantage through their acquired capabilities through the acquisition of the market leader in music technology intelligence, The Echo Nest.
Through the analysis of Spotify’s financial statements it becomes evident how the big three, the major record labels, are benefitting from the increased spread of listening diversity through Spotify’s music recommendation features.
The conclusion of the thesis is that the niche artist is not benefitting from Spotify’s music discovery features, because the music recommendation systems are biased by popularity, and therefore not able to guide the listener into the long tail. Furthermore, Spotify’s features and music recommendations might only benefit popular artists signed by the big three. Spotify can consider their capabilities of creating music recommendations as a competitive advantage, even when these recommendations lacks novelty. This competitive advantage might not be sustainable in the future due to the increased data-driven competition in the market place.

EducationsMSocSc in Management of Creative Business Processes , (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2018
Number of pages87