assessment criteria
- summary of the key elements of the PRESTCOM model of environmental analysis that is relevant to the sector your chosen organisation operates in
- conduct a SWOT analysis of your company
- outline feasible marketing recommendations
references included
academic year ...
Introduction
Spotify is in the music streaming
industry and is a digital music, podcast
and video service that gives people
access to millions of songs and other
content from creators all over the
world. Spotify is available across a
range of devices in almost 80 countries.
Spotify currently has 422 million users,
182 of them being paid subscribers
across 183 markets. (Spotify, 2022)
PRESTCOM Analysis
Political
During the pandemic, the music streaming industry was affected in multiple ways. For example, less people were
attending concerts, buying albums or CDs from fear of being exposed to the virus – and instead converted to using
online using streaming services.
However, the industry also suffered in relation to branding and advertising revenue. This is important because
companies in this sector generate revenue through premium subscriptions and advertising. In the first half of 2020 -
25% of media buyers had paused their advertising efforts, along with a further 46% having reducing spending,
affecting industry revenue, artists’ income and more. (Hall, 2020)
Regulatory
As the music streaming industry has become increasingly popular, pressure has been rising for streaming platforms
to pay their artists fairly. Current royalty rates are set by streaming services themselves and are overall very low, for
example artists receive as little as 13% of over £1 billion a year of revenue of music streaming in the UK. There are
current campaigns to update laws – specifically the UK’s 1988 Copyright, Designs and Patents Act. Updating this law
would mean that artists are fairly paid as opposed to being forced to comply with set company rates. (Mondaq,
2022)
, Economic
In Feb 2022, the unemployment rates of the UK were the following (Statista, 2022):
- England – 4%
- Scotland – 3.5%
- Wales – 3%
- Northern Ireland – 2.5%
(See Fig.1 for reference) With a low unemployment rate, consumers have high spending power and confidence to
subscribe for more premium plan streaming services. Thus, giving music streaming companies an opportunity to
increase profit margins.
Fig.1
Social
In the music streaming industry, consumers across all age groups have high engagement levels with digital music
streaming. With the highest being consumers ages 16 -24 with 96% engagement and the lowest being ages 55+ with
67% engagement. See Fig.2 for reference. (Statista, 2021)
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