Summary of research to implement Spotify in Belgium. Key is advertising based social music. Expert and consumer research! See full research 'Thesis Social Music'.

1. Spotify Belgium?
A presentation based upon the masterdegree research about
the role of social music in Belgium
By Joachim François

2. Introduction research
• My research includes two parts:
– 12 expert interviews within the Belgium music Industry
about the role of social music
– 16 in-depth consumer (aged 19-23) interviews about the
way they consume music online and their perception
against advertising on social music platforms and the
platforms themselves (Spotify, Last.fm)
• Both parts in the light of the upcoming importance of
social music on the internet (in casu the role of
Spotify); confirmed through researches of IDC, Insites
Consulting, Forrester and Ispos.

3. Introduction research
• Title: “The role of social music in an era of internet
piracy: an explorative research among professionals
within the Belgian music industry combined with a
qualitative research in the social music consumption of
the Flemish music consumers between 19 and 23 years
old and their perception of promotion”.
• University: Free University Brussels

4. Part A: Experts

5. Part A – list experts
• Twelve experts selected based on the value chain of social music in Belgium:
• N. De Belie Manager Department Music : Belgian Entertainment Assosiation
• W. Degraeve Projectmanager Pop/rock: Music Centre Flanders
• G. De Blaere CEO N.E.W.S and B.I.M.A
• V. D’Harcour E-marketing manager Universal Music
• J. Forster Global Sales director Spotify
• X. Laoureux Strategic Manager TBWA
• L. Nowé CEO Poppunt
• J. Pauly Projectmanager
• L. O. Berg Partner Heartbeats International
• T. Schets CEO Petrol
• H. Valkenaers Manager Homerun Records (Milow)
• ISP Anonymous

6. Part A – General results experts
• An explorative research with experts has the goal to
gain information in an neglected area of research:
• All experts are very enthusiastic about streaming and
choose Spotify over Last.fm -> Last. fm is too niche-
specific while Spotify can reach all kinds of market
segments
• Five experts state the fact that streaming is perfect
for younger individuals that do not want to pay for
music, therefore they ‘pay’ by watching advertising.

7. Part A – General results experts
• All experts doubt the premium model with younger
kids. The premium model will be important for adults
older than 25 years old.
• All experts would like to have Spotify in Belgium to
counter piracy, altrough piracy is less pernicious in
Belgium than other European countries; experts have
asked me why it takes so long to implement Spotify
in Belgium.
• All experts see a future with Spotify

8. Part A - Advertising results
• Within the expert panel two major advertising
agencies were interviewed: TBWA and Heartbeats
• 1 Belgian and 1 Swedish agency
• Both very positive about using Spotify within
integrated campaigns to stimulate brand awareness
or brand recall or simply conversations with their
customer
• Spotify social very attractive for advertisers
• Banners less attractive

9. Part A - Problems
• Biggest problem with experts: monetisation
– Experts are reluctant regards the compensation
they receive from Spotify (and other streaming
companies)
– Every expert hopes to receive a higher
compensation in the future. The compensation
needs to grow simultaniously with the growth of
the company: they understand the evolution of
the streaming process
– Experts presume that the biggest share goes to
the majors and smaller labels receive much
smaller royalties

10. Part B: Consumers

11. Part B: Consumer interviews
• In-depth interview with sixteen Belgian music consumers (age 19-23)
A) 8 consumers that use Spotify
B) 8 consumers that do not use Spotify
A) The consumers that use Spotify were asked how and when they used
Spotify; whether there is a difference with other online streaming services
and if their illegal download behavoir is reduced
B) The consumers that do not use Spotify were showed all possibilities of the
service and used it for at least a week. After, they were asked how they
experience the service; how this reflects on their online music consumption
and illegal downloading. These consumers were also asked if they would use
the service in the future.
• In both groups I tried to explore the use of advertising via social music
services (Spotify and Last.fm) and how consumers perceive various kinds of
advertising

12. Part B - Explanation method
• In-depth survey is a Qualitative Research
– Context is king
– No numbers, no percentage
– It’s about what is told and how certain events or
experiences are percieved
– Open questions
– Research in field with very little academic research
• In this research I’ve conducted this kind of research,
but strengthen it with quantitative results of
marketresearch agencies (see next slide)
• Percentages, numbers, no open questions
• Generalizable to bigger community

13. Part B - Explanation method
• Quantitative research strengthen the qualitative
• Insites consulting survey (with 32.000 Europeans) states an
equal music streaming rate between Belgium consumers
and United Kingdom
• IDC sees a rise of importance of streaming with Belgian
consumers, althrough Last.fm is too niche
• Ipsos (1000 British) sees Youtube as most important and
Last.fm as least important streaming services – Spotify lies
in the middle
• MCDC study (2.000 Belgians) shows that streaming
services are the perfect applications to attract a certain
‘savvy’ music consumer

14. Part B – Explanation consumer age
• This group was the most lucrative segment in the past
(in ‘60 en ‘70)
• Now they are the least attractive segment and they
are used never have to pay for music
• 19 to 23 year old consumers are digital natives and
digital savvy: they are technology-minded and know
everything about circumventing the law to get their
music for free (or pass their music around via friends)
• Therefore free streaming (payed by advertising) is
very lucrative alternative for the music industry
• “Better to have something than nothing”

15. Part B - Results
• 3 kind of results:
• Streaming in general
• Spotify an sich
• Advertising on streaming services

16. Part B – Results ‘streaming’ (1)
• Streaming very popular in Belgium: especially Youtube
• All 16 consumers:
– when they hear a song somewhere, they surf to Youtube to listen
it for the first time (streaming is #1 in discovering music)
– when they like this song, they will download it via illegal ways to
put the song on their iPod
 Spotify should take the role of Youtube!
– they are all very attached to their mp3 device (maybe a threat to
Spotify since it isn’t available on iPod)  therefore the mp3
format is very important for this group
– Find Youtube too rigid; Spotify very playfull and consumer friendly
– discover new music via Social Networks  recommended by
friends (Spotify “social” plays beautifully in this evolution)

17. Part B – Results ‘streaming’ (2)
• Streaming very popular in Belgium: especially Youtube
• All 16 consumers:
– would not pay for music if they can get it for free!!
– find online music streaming additional to illegal downloading
– almost never buy a cd, only to support an artist they like or if they
want to listen to their music in their car
– Use Last.fm only for statistics; Spotify for really listening online
and be able to play direct without loading
– would not pay for premium version  exept one consumer who
has bought Spotify for a whole year: he stopped his illegal
downloading! He only downloads (illegally) the music that is
unfindable on Spotify

18. Part B – Results ‘Spotify’
• Beside the elements stated in the previous slide, their was a small
difference between Belgian Spotify users and the non-users who saw (and
used) it for the 1st time. I made this subdivision to see how Spotify would
be welcomed in Belgium where a lot of people don’t know the service.
• Seems that both groups are very positive about Spotify:
• The group Spotify users especially searched for your
application via the internet and search ways to circumvent the
IP-tracking. They really want your service!
 Their illegal downloading behavior has reduced since they
started using Spotify
• The second group (1 testweek) was also very positive about
the use of Spotify, allthough they are more reluctant that how
much they are going to use it. All like mp3 (for free) so much...

19. Part B – Results ‘Spotify’
• Both groups find Spotify:
• The most user-friendly online music service
• ‘Direct playback’ and ‘drag and drop’ in playlists
• Functionality of playlists is very neat
• Accessable from every computer in the world
• For free
• Social music is key  send new music to friends
• Not too much advertising
• Minor point: not accessable from iPod or car

20. Part B – Results ‘advertising’
• Audio-bannering via Spotify less annoying than normal
bannering; at least if the message is not too long and if it is
relevant to the user. Visual banners must not be too big and
may not interupt the use of the service.
• All bannering is accepted because this consumer segment
understand that they have to watch to advertising in
exchange for great content.
• These - young online - music consumers are best approached
when there is a kind of engagement with a advertiser and
Spotify (contest, game via Social Neworks...) that 1) gives
added value or 2) brings fun with friends through music. The
contest has to be relevant to the consumer off course (f.e. Fiat
integrated campaign). It’s clear that Belgian consumers don’t
differ with countries where Spotify is available.

21. Part C: Conclusion

22. Part C: conclusion
• Belgium is ready for Spotify.
• The Belgian Music Industry wants to be on your service
• Belgian music consumers want to use your service
• Piracy is your biggest enemy: consumers don’t want to change
their downloading behavior because it is free. Spotify will be
additional to online music usage but plays a vital role in
discovering and dissemination of music online.
• Banner advertising is possible  can be annoying 
integrated campaigns (where the Spotify-service is used to
promote a brand) are better for company and Spotify an sich
• Mainstream social networks are very important for Spotify ->
this consumers like to share music with each other

23. Thanks you for reading!
Further Questions:
Joachim François
joachimfrancois@gmail.com
+32 472/74 04 36