How can you survive the digital disruption? Maybe listen to Spotify…

The digital disruption has shattered the foundations of many industries. Entire sectors relating to news (Huffington post, Medium), transportation (Uber, Lyft), and travel (AirBnB, Tripadvisor) were transformed once the rules of the game had changed. Whether you are an established company or a newcomer, you probably ask yourself: How can we thrive in this new competitive landscape? To answer this question, it’s worth listening to Spotify… and seeing what they have done.

One of the earliest victims of the digital disruption were the ways that we listen to music. Before streaming, music was expensive and consumers often had little control over what they listened to. Now, music is everywhere and people can access any song, any time.

This is great for consumers, but for the music industry, it posed a serious question: How does one compete in a competitive landscape where your primary product has become an easily-accessed, ubiquitous commodity?

Spotify’s answer: be about more than just music. When you sign up for Spotify you enter a global community of users expressing themselves through the music they love. Whether it’s sharing via social media, adding friends within the app, or integration into the world’s most popular dating apps, Spotify has made music streaming not just about listening, but about expressing yourself.

To survive the digital disruption and even thrive, a company has to be consumer-oriented and empower its users. Spotify does this in three different ways: It is a tool for fans of even the most niche genres to share their tastes in global communities. Second, Spotify facilitates conversations between artists and listeners to connect with music in more meaningful ways. And last, through integration into the world’s most popular social media apps, Spotify helps consumers to express themselves, whilst simultaneously generating huge amounts of earned media.

Letting the user define popular

Spotify’s ability to ride the digital disruption has largely hinged on how it has harnessed the rise of social media. Before smartphones, social media and streaming, music sharing between a group of friends relied on in-person interactions: Groups of friends would meet up to share and exchange mixtapes.

Spotify used the power of social media to transform your local group of friends into a global community around niche music tastes.  What we see now is a landscape where each social group is represented with artists from genres from Afrobashment to Danish rap, with Spotify encouraging and empowering users to express themselves and forge relationships based on music.

The digital disruption has allowed Spotify to take advantage in the rise of genres like Afrobeat.

Before the digital disruption, which songs made it to the top of the charts was decided by big label companies. Now, individual users define what’s popular by sharing their favorite songs. And as global access to social media and streaming services grows, world music is experiencing a boom.

As Spotify’s head of Global Cultures explains: “We have a new music-industry landscape which is much more diverse than it could have possibly been before.” The norm today is handing power over what’s popular to the consumer, allowing everyone to find the music that resonates with them.

Creating Conversations

Another part of Spotify’s strategy is to facilitate multidirectional conversations between users and artists. Spotify enables artists to directly interact with subscribers through Instagram and Facebook, and it also offers the option to follow your favorite artists. These features have spawned a rise in boutique labels representing artists not necessarily primed for the Billboard charts.

“Spotify empowers a new generation of musicians who prosper by making deep connections with more concentrated fan bases”

Spotify’s features make it possible for a new generation of musicians to prosper by making deep connections with more concentrated fan bases. The ability for artists to link listeners directly to Spotify from their Instagram and Facebook stories, Spotify’s social features such as adding friends and following artists, and Spotify’s integration into Messenger and iMessage allow users to find artists with whom they connect more deeply and build meaningful connections with friends and followers based on this.

Artists now rely on social media to form connections with their fans beyond music. With these followers actively seeking out their content, artists can move away from invasive advertisements to promote new music and instead drive users straight to their discography using stories.

Artists build intimate relationships with fans on social media to distribute music.

Your own business might not be about music, but you can apply the same principle: Stay away from the traditional focus of reach and mass marketing, and instead empower members of a certain tribe (often centered around a niche activity or taste) to share and connect with others in more meaningful ways. By taking this customer-oriented stance, your business can not only survive the digital disruption but even thrive.

Turning Customers Into Influencers

Spotify empowers users to express themselves through their integration with Instagram, Facebook Messenger and iMessage, Tinder and Bumble, and even the development of their own built-in social media functions.

Spotify has done all it can to make expressing yourself as easy as possible to create buzz and leverage its users across all social media platforms. A prime example of this is Spotify’s integration with Facebook and Instagram:

The digital disruption has made listening to music as much about interacting with your friends and followers as hearing your favorite songs. At the touch of a button, users can share songs, albums, or playlists to their Facebook and Instagram stories directly from within the app.

Spotify uses innovative features to use the digital disruption to its advantage.

Spotify thus shifts its entire value proposition from “these are the songs we offer”, to “here’s how we help you build and maintain social connections”. In every industry we see that users don’t want the ‘perfect’ product, they want the product that’s perfect for them – Spotify provides each user a totally personalized experience, allowing them to paint a totally customized picture of themselves to their friends and followers.

Integration into dating apps, as well as some of the in-app social features turns users from passive consumers into active ones. Users can send songs directly within the Spotify app, check out what others are listening to, and even work on collaborative playlists.

Expressing oneself isn’t something that should be fenced in, and Spotify knows that. They collaborate with Bumble and Tinder to provide users another way to express themselves. The ‘top songs and artists’ features on these dating apps further encourage users to build and grow relationships based on the music tastes they share. Spotify’s risqué integration into these apps is emblematic of its strategy to create conversations and empower users to express themselves through music.

Spotify uses the digital disruption to to generate mass earned media.

Beyond the user, these features help Spotify, too. Empowering users to share their experience creates earned media, consumer advocacy, and user-generated content. Another reason for why enabling conversations is key for surviving the digital transformation.

A prime example of this is the Spotify Wrapped campaign. At the end of each year, users are provided a detailed rundown of the songs, artists, and amount of music they listened. Spotify encourages users to share their stats on social media, and many do because it’s an expression of themselves. Spotify’s 2016 wrapped campaign received over 1500 pieces of news coverage, generated 1.2 billion earned impressions, and over 1 billion streams.

Sounds intriguing? View the explainer below with the statistics described at 1:37.

In essence, Spotify creates content tailored for consumers to share on their social media feeds. For your own business, you can ask yourself: Why do people use our service or buy our products? What value, beyond the functional value of our offerings, do we provide? Once you identified this (e.g., expressing yourself), you can come up with similar ideas of how you can leverage customer insights to create tailored content that your customers will want to share with their friends.

Survive the digital disruption by redefining your product

All this cross conversation between Spotify’s users and artists doesn’t just build an incredibly strong sense of community, it creates a platform for self-expression and a tool for creating connections. Spotify’s leveraging of social media, as we can see, is pivotal to its marketing efforts, essentially utilizing its multi-million subscriber base as micro-influencers. This is crucial in building advocates for the brand and building trust for those considering signing up for a subscription.

Spotify offers all you ever want from a music streaming service: An extensive catalog, affordable pricing, and hi-fi audio all. But more than just these basic table stakes, Spotify recognizes that expressing oneself lies at the core of the music listening experience. The ability to find one’s community, to engage in multidirectional conversations, and to express oneself through music even outside the Spotify app all create a service that goes beyond the music itself.

To survive the digital disruption, Spotify has taken a fully customer-oriented approach. And as we can see, it’s paying off.

This post was written by Archie Mitchell and Dr. Joachim Scholz. The authors thank Alexis Ardito and Maxwell Motley for their help in compiling research for this article. Please follow the authors on Twitter for more information on this topic.

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