| Summary: | 碩士 === 國立交通大學 === 企業管理碩士學程 === 104 === Music industry has changed from providing physical goods to digital format and peripheral goods that forces the whole ecosystem to change as well. Traditional music industry was established on platforms that focus on record labels. Record labels work with artists and manufacture music for them, in the other side promote the music to customers thus build up a two-sided market. But as the technology improves, the digital format music can be transferred rapidly and people tend to shop online, a new ecosystem for music industry emerged. In this new ecosystem, players that involved in it were quite different and companies, no matter record labels or streaming music companies are eager to find new strategies for competition.
A new streaming music company, Spotify, had arisen in this field with a business model that differs from traditional record labels. The strategy they took in this new ecosystem is attracting as many people as they could in the beginning and then turns them into paid members, which is so-called freemium model. This model is very common when a company wants start a new business in two-sided market. But Spotify had a very different business model from other streaming music companies so it can grow fast at certain times. The reasons how it accomplishes this is determined by its strategies that are very different from other companies. We will see even most streaming music companies use freemium model to start their business, the problem is most companies are running a business with no value added; however, Spotify selected some strategies that enable to create value in their own business model, so eventually there would be a big difference in their revenue sources.
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