Since its launch in Sweden in early 2008, Spotify has significantly changed the way people discover and listen to music online.

Recently launching in Australia in May, Spotify boasts a library of 16 million tracks housed in an online social format, making music consumption a shared, communal activity.

Spotify – facts and stats

Spotify is a digital music service which either allows users to stream music for free while being subject to advertisements, or take out paid subscriptions that allow access to the music library without the advertisements.

The service offers access to music from a range of major and independent record labels including EMI, Warner Music Group, Sony and Universal.

Business model

Spotify’s business model is based on three different levels of subscription, encouraging users to convert to paid subscription through the elimination of advertising. The free service offers basic, ad-supported access to the song library.

Paying users can choose between Spotify Unlimited, which offers ad-free access for $6.99 per month, or Spotify Premium, where subscribers have access to exclusive content, competitions and unlimited ad-free listening for $11.99 p/m.

Social media integration

The service encourages an innate social music sharing experience by asking users to sign in via their Facebook account. Users can then access friends’ and brands’ playlists and recommendations, as well as post individual Facebook updates about the songs they are listening to.

According to Facebook, the Spotify-Facebook partnership has close to 20million monthly users and a total reach of 50billion users.

Advertising partnerships with brands

Upon its launch in Australia, Spotify already had exclusive advertising partnerships with Commonwealth Bank, Carlton United Brewers, McDonald’s and Virgin Mobile.

Spotify allows brands to emotionally engage with their market through music. Ad formats include individual ad pages that allow brands to create longer campaigns with updated content, audio and digital calls to action.

Spotify and Coca-Cola

Spotify has allowed Coca-Cola to release their own branded music app with the creation of their #drinkmusic campaign. This partnership capitalises on Coca-Cola’s use of music as a key form of engagement with consumers.

Brands are using music and Spotify as a way of creating meaningful engagement with users, allowing new audiences an alternative insight into their product.

To start listening to Spotify sign up here.