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The Network Economy

Spotify has two options when using their service, the premium ad-free version, and the free version. Spotify is currently one of the most popular music streaming services, as of writing, there are over 170 million users, 83 million (Richter, 2018) of which are paid premium users.

 

                                                

                                     (Ritcher, 2018)

              

The production of goods during the industrial age was considered the most significant form of economic activity. In the manufacturing of goods human labor was used, buyers and sellers would negotiate the goods with each other. In the past, the transferring of ownership of goods was a significant factor to physical success, however, in the new era, physical ownership is being replaced with digital access. With the new economy, human experiences have been manufactured and sold.

 

With modern society’s technological advancements, many of our lifestyles rely on connectivity to digital systems. With this, we are allowing for emotions to drive interactions in the digital world. As a society we have been surrounded by technology and information, this can be seen with the development and usage of smartphones, the Internet, computers, social networking sites, and applications. With the technological development we have been seeking desires to be met, leading to the ‘nanosecond culture’; what is trending currently will quickly grow out of fashion and be replaced with a newer and better version of the product or service.

Spotify’s free user experience is a service that is interrupted by advertisements, does not have high definition audio quality, restricts users on mobile devices and does not have the offline mode. The psychological notion that free products and services are powerful in the marketing scenario. This creates an attraction for Spotify within the attention economy.

The advertisements that are within the free version of Spotify are required to support the services.

This gives other companies a location to advertise their campaigns. Within the first quarter of 2015, Spotify had an increase in advertisement revenue (Ingham, 2015).

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