Spotify and the Hyper-Social Business Model

Spotify is an online music streaming service that arrived in the US in July 2011. 

After downloading the software, it is easy to log in using a Facebook account. The service is free with advertisements for the first six months; during this initial trial, users can listen to an unlimited amount of music. After the first six months, however, listening is limited to 10 hours per month and five listens per track unless users upgrade their accounts.

An upgraded account without advertisements costs anywhere from $4.99 to $9.99 per month depending on the version. Spotify, in many ways, is similar to Netflix, Hulu, or any other pay for content site.***

Users can see what their Facebook friends are listening to from both the Spotify app and their Facebook ticker and news feed. It is a simple way to discover the music your friends enjoy.

Spotify is pioneering the Hyper-Social Business Model. In this article Patrick Salyer explains how Spotify is using Open Graph 2.0 (users can now listen, read, cook, etc. along with using the like button on Facebook) to create a balanced user experience which has helped Spotify become the leader of streaming music.

To briefly sum up Salyer's points:

Spotify is just so easy to use with Facebook
The transition back and forth is seamless. See what music your friends are listening to in real time. Drag, drop, or click to easily listen to or share music. There is no redirecting to buy or find similar artists, you click and listen.

Spotify empowers listeners to control privacy
As we become more and more bombarded with social media, companies need to balance privacy and sharing. Spotify caters to both the hyper-social users and the more private listeners. Because users can easily turn off the fire hose, they are actually more inclined to share.

Spotify challenges the current state of social media
Businesses that are safely using the like button have just been left in the dust. It's time to find a better way to engage. Spotify is a leader in hyper-social business by showing you what your friends are listening to right now rather than what they like.

***For those interested, here is an interesting take from the Harvard Business Review about Spotify and why listening to music is fundamentally different than watching movies or television shows. This author contends Spotify is perfect for a bait and switch. If Spotify is forced to raise prices like Netflix did, it is more difficult for consumers to walk away from their music collection than their movie or television show collections. Music listeners want to own their content and do not want to "rent" a music library.