By Betsy Vereckey |MIT Sloan Ideas Made to Matter | December 21, 2021
Fifteen years ago, Spotify was founded as a go-to destination for music lovers, a place where users could stream whatever tunes they wanted without having to buy them. Since then, the Swedish company has watched its number of subscribers tick past 400 million as it expands into podcasting, live audio, and audio books.
“We want to have a billion users,” Paul Vogel, Spotify’s chief financial officer, told attendees at the 19th annual MIT Sloan CFO Summit last month. “We want to be the No. 1 global streaming audio player, and that means having everything, as much as you could possibly think [of], in audio.”
Spotify’s journey to finding a successful model is applicable for digital companies today that are trying to grow their customer base through subscriptions.
Vogel, who was interviewed byCharles Kane,a senior lecturer in Global Economics and Management at MIT Sloan, described how Spotify experimented with its service offerings before settling on a “freemium” subscription model. Users can either pay for the streaming service and listen ad-free or choose to sign up for a free subscription and listen to ads.
Here’s what Vogel had to say about how Spotify plans to grow its business, not just by offering a mix of subscriptions, but through research and development and acquisitions as well. They’re lessons other companies can draw on as they compete in the burgeoning market for platform services.
