Spotify and Gartner’s Hype Cycle

If you’re not familiar with Gartner’s Hype Cycle, then you should watch this short video from WikiAudio that gives a great overview of what the Hype Cycle is all about.

As we learned from the video, there are five stages in Gartner’s Hype Cycle. They include; technology trigger, peak of inflated expectations, trough of disillusionment, slope of enlightenment, and plateau of productivity. These five key stages represent stages of a technology’s life.

Here’s a good visual representation of Gartner’s Hype Cycle that I found on Slide Hunter.

Mike Walker, the research director at Gartner, said the following to the Wall Street Journal, August 15, 2017…

“Innovation isn’t a steady line that moves upwards… It goes in peaks and valleys, and you’ll see a spur of innovation that’s going to cause a trigger in the marketplace or rapid advancement.”

So where is Spotify currently on Gartner’s Hype Cycle? I think the strongest argument is that Spotify is currently at the peak of inflated expectations. According to Spotify’s most recent financial statement, the company reported revenue of over $6 billion but had a net loss of over $1.2 billion. At the same time, Spotify currently has tens of millions of more monthly users than any of its competitors. According to Spotify, they now have over 140 million active monthly users. One of Spotify’s problems is that they have to pay royalties to artists and record companies. So even though tens of millions of people are using the platform monthly, as the listenership increases, so do the royalties expenditures. If Spotify isn’t capable of generating a profit while having 140 million active monthly users than pretty soon Spotify will fall into the trough of disillusionment.

I know what you’re thinking… If Spotify is about to fall into the trough of disillusionment, then why should I promote my brand on the platform? Good question! Remember, Spotify has the highest monthly users of any streaming service, and even though they will experience the trough of disillusionment, they will eventually start on the slope of enlightenment and then end up on the plateau of productivity.

If you’re seriously considering promoting your brand on Spotify, check out this post about Spotify’s competition.

How does Spotify’s UX/UI appeal to Millenials?

The majority of Spotify’s users are millennials. This means that Spotify has crafted their user experience to appeal to millennials. Millennials grew up using technology, but it’s still important to keep UX/UI simple and easy to navigate.

Courtesy of Medium Corporation, here’s Spotify’s sitemap…

On the homepage of Spotify, there are four main sections listed on the top of the landing page. There’s “Featured,” which lists the top artists that are trending on Spotify. The next section is “Genres & Moods,” this page breaks down the music into different genres and it gets really niche, for example, there are genres such as “gaming,” “party,” and “Christian.” The third section on the top of the landing page is “New releases,” this section provides a list of albums and songs that have recently come out. The last section on the top of the landing page is “Discover,” this section gives you music listening recommendations based on what you listen to regularly. For example, in my Spotify account in the “Discover” section there’s a heading that reads, “Because you listened to Manchester Orchestra,” and then it provides links to other similar artists like Bad Books and Brand New. Personally, this is one of my favorite elements of Spotify’s UX. Here’s a picture of recommendation…

On the side menu of the landing page, there’s a search bar where users can search for artists, albums, songs, and even their friends Spotify accounts and playlists. Under the search bar there’s a link to the home screen, and under that, there’s a link called “Your Music,” this is where all your saved playlists reside for easy access. The “Your Music” page is a great UX feature that helps users keep their music organized. You can also create new playlists from this part of the website. At the bottom of the side menu on the landing page, there’s a link to your profile information.

At the very bottom of the screen, you can control the volume, skip songs, pause, add songs to your queue, and add songs to playlists.

Overall, Spotify’s UX/UI does a great job of appealing to their main user base, millennials.

How long will Spotify be relevant to millennials? Will the platform still be valuable for marketers to utilize in the next few years? Where is Spotify in the product lifecycle, or rather, the hype cycle? Read about Spotify’s Hype Cycle.

Spotify Target Audience: Millenials

The target audience that uses Spotify is undoubtedly millennials. According to Spotify, 72% of users are millennials, in addition, Statista reports that 26% of Spotify users are between the ages of 18 and 24. Jeff Rossi, the Spotify business marketing global director said…

“As the largest global streaming service, we have a deep understanding of millennials from our data on streaming habits… For marketers looking to reach this highly sought-after group, we understand that millennials are listening more frequently and streaming in more places than nonmillennials, including most often on mobile and desktop as they move from home to school to work. We also see that millennials’ streaming habits are not as impacted by traditional peak consumption periods like prime time or drive time. They are connected all day from the moment they wake up.” 

This is great news for marketers that are seeking a music streaming platform to promote their brand on. Not only are millennials using Spotify more than any other age group, they’re also using the service all the time. Being a millennial myself, I can say that this is true because I tend to have Spotify on while I shower, drive, use other social, etc.

Check out this infographic from Spotify that provides more detail about the music streaming habits of millennials…

As you can see, the average millennial that uses Spotify spends 143 minutes per day streaming music on the platform. One of the reasons Spotify has been successful amongst millennials is because of the social media elements that have been added to the platform. For example, you can add friends on Spotify, create playlists, share playlists with friends, and follow other peoples’ playlists. As Facebook and Twitter lose favor with millennials, they will increasingly be seeking new social platforms that they can connect with their friends in unique ways. Being able to share the music they love with their friends is one of Spotify’s strongest competitive advantages.

Spotify is an ideal platform for marketers to reach millennials. If a user isn’t signed up for premium, then they are exposed to advertisements every thirty minutes of use, and remember they spend an average of 143 minutes per day using Spotify!

If you’re serious about marketing to millennials on Spotify, read about how their UI/UX appeals to millennials.

Spotify’s Competition

The music streaming industry is becoming increasingly competitive. Once dominated by Pandora, the industry now has a lot of competition, and because of this, the quality of music streaming platforms has increased. Since streaming music is so popular, they’re great platforms for marketers to reach their target audiences. So which platform is the best for marketers to utilize? Spotify is currently the most used music streaming service, but it certainly has some strong competition.

Spotify’s competitors include:

• Apple Music
• Google Play
• Pandora
• Tidal

Additional information on Spotify’s top competitors:

• Apple Music
  • $10/month
  • 30+ million tracks available to stream
  • 30 million active users
• Google Play
  • Free-$10/month
  • 30+ million tracks available to stream
  • 7 million active users
• Pandora
  • Free-$10/month
  • 30+million tracks available to stream
  • 81 million active users
• Tidal
  • $10-$20/month
  • 25+ million tracks available to stream
  • 3 million active users

To compare, Spotify has a free option and a premium option for $10/month and has 30+ million tracks available to stream. Spotify also has a whopping 140 million active users on their music streaming platform. As you can see, there isn’t much variation in regards to pricing and number of tracks available amongst the music streaming competitors, but there are some pretty big differences when it comes to the number of active users. Check out the graph below (provided by Business Insider) that compares the growth of Spotify and Pandora.

Since mid-2014 Pandora’s number of monthly active users has plateaued at around 81 million. Spotify’s active monthly users surpassed Pandora’s monthly active users mid-2015. One of the reasons why Pandora’s growth has plateaued is because the streaming service is only available in Australia, New Zealand, and the United States; whereas Spotify is available in over 60 countries.

So what are the implications for marketers? I think it’s pretty straightforward, Spotify has the most monthly active users, and they are still growing that user base exponentially. If you’re considering utilizing a music streaming social platform to promote your brand, you should definitely consider Spotify since it has such a huge user base that’s still growing.

If you’re wondering if your target audience uses Spotify, check out this post about Spotify’s Target Audience.