Business and Ethics

Article # 1 Group # 4

1. Describe the situation, problem or opportunity faced by the company. Is this an issue that many businesses face or is it specific to one industry or region?

The main issue the company is facing is rather complex as it’s both a problem and an opportunity in my opinion. The problem being that Spotify needs to manage a few different things in order to get their launch off the ground. The first is conquer the remaining labels/artists in the music industry that are holding back on allowing them rights to their music catalog, which could eventually cost them customers, due to a lower level of selection. The second “problem” is going to be pulling their customer base away from other businesses offering the same service such as iTunes, Pandora, etc and coming up with additional services they provide, or “perks” that their competitors don’t offer.

In my mind, the opportunity is in the way they make their profit. They have taken music, which has been prone to piracy for just over 10 years due to the “Napster Reign” and found a way to offer the downloads for free which grabs their customer base in this new age of technology, but they’ve caught them in having to pay a fee for being able to take their music with them, using it on different devices, which is something that is a huge demand in today’s society. They charge a minimal fee for that service, yet they are making millions of dollars a year in the advertising on their site, and are providing a service to three different arenas, first to the music fans that want to download music as cost effectively as possible, and second to their customers (mainly businesses) that want to have the opportunity to advertise on a site that to date has some 400,000 subscribers in America alone. And last but not least, to the music industry as a whole, bringing sales back up for the first time in ages. Since 1999 there has been a huge decline in sales due to piracy on the internet, and Spotify, has...