Business Case: Spotify Subsidising Local Music Venues Executive Summary In the wake of the COVID-19 pandemic, local music venues have been struggling to survive. These venues are crucial for nurturing emerging artists and maintaining vibrant music communities. Spotify, as a leading music streaming platform, has a vested interest in supporting these venues to ensure a continuous influx of new music and talent.
This business case proposes that Spotify subsidises local music venues to benefit both the venues and Spotify’s long-term business interests. Objectives Support Local Music Scenes: Ensure the survival and thriving of local music venues, which are critical for discovering and promoting new artists.
Strengthen Spotify's Brand: Position Spotify as a champion of music culture and community. Secure Future Content: Guarantee a steady flow of new and diverse music by supporting grassroots venues where artists typically start their careers.
Benefits Artist Development: By supporting local venues, Spotify helps cultivate the next generation of artists who will eventually be featured on its platform. Community Engagement: Subsidising local venues strengthens community ties and promotes live music, aligning Spotify with cultural and social causes.
Brand Loyalty: This initiative can enhance brand loyalty among users and artists, who see Spotify as a supporter of the broader music ecosystem. Content Diversity: Ensuring venues stay open helps maintain a diverse pipeline of music, enriching Spotify's catalogue. Costs and Funding Subsidies for Venues: Allocate a portion of Spotify's marketing or community outreach budget to subsidise struggling local music venues.
Partnerships: Collaborate with music organisations and local governments to co-fund and support venues. Implementation Plan Research and Identify Venues: Partner with local music organisations to identify venues in need of support.
Set Criteria: Develop criteria for selecting venues based on factors such as community impact, artist promotion, and financial need. Create a Grant Programme: Establish a grant programme where venues can apply for subsidies. Promote the Initiative: Use Spotify’s platform to promote the initiative, highlighting success stories and the impact on local music scenes. Monitor and Evaluate: Regularly assess the effectiveness of the subsidies, collecting feedback from venues and artists to refine the programme.
Booking Support Shared Risk Model: Spotify could cover a percentage of the hire fee and artist costs upfront, reducing the financial burden on event organisers. Revenue Sharing: Implement a revenue-sharing model where Spotify takes a small percentage of ticket sales after a threshold, ensuring that venues still benefit significantly. Marketing and Promotion Spotify Playlists and Promotions: Feature local venues and upcoming events on Spotify's platform to drive ticket sales.
Sponsored Content: Use Spotify’s advertising platform to promote events, with Spotify covering part of the marketing costs. Community Engagement Local Artist Spotlights: Highlight local artists performing at subsidised venues, increasing their exposure and drawing more attendees. Fan Engagement Initiatives: Offer exclusive content, early ticket access, or meet-and-greet opportunities for Spotify users attending events at these venues
Risks and Mitigation Misallocation of Funds: Implement strict criteria and oversight to ensure funds are used effectively. Limited Reach: Start with a pilot programme in select cities to assess impact before scaling up.
Brand Misalignment: Ensure transparency and clear communication about the goals and benefits of the initiative to avoid misconceptions.
Conclusion Supporting local music venues through subsidies is a strategic move for Spotify. It not only helps preserve vital parts of the music ecosystem but also strengthens Spotify’s brand, ensuring a rich supply of new music and fostering community goodwill. By investing in the grassroots level of the music industry, Spotify can secure its future as a leading platform for music discovery and enjoyment.
