In the current streaming industry, it is very hard for startups to fight against the giants like Spotify and Apple Music. Moreover, it is almost impossible to maintain a music streaming company. This is also what the founders of Kollekt.fm ran into. These two entrepreneurs started their business in 2013 while they were studying and founded a platform that transformed links to music into playlists. They soon found out that they did not have an efficient business model; their revenue model did not work properly. It was too hard to offer the service in a profitable way.
When the founders hit rock bottom, they encountered one of the frequent users of their service. He told them that he was a dj and made money from developing the playlists for coffee rooms in Amsterdam. This gave the founders new motivation. They went from shop to shop in Amsterdam and did market research about the shops’ music facilities. Eventually, the founders came up with the idea of Atmosphere, which is a service that connects shops and hospitality businesses to musicians. For a 15% commission, Atmosphere makes sure that the shops get personalized playlist which match the brand image of the companies. In this way, the company was able to make money from making playlists. However, the requirements to join the platform are strict. Only unique music curators are allowed to develop the playlists, since the company wants to maintain its high quality service. The main goal for the coming period is a collaboration with an establish jazz musician or dj, in order to raise more brand awareness.
Nowadays, approximately 20 firms are already using Atmosphere. The customers vary from supermarkets to restaurants, from clothing stores to work spots spread over more than 100 locations. The fee for the service is €30,- on a monthly basis which can be extended with €15,- for an offline streaming cabinet and for €300,- extra the company develops a custom-made website for their clients which contain all of their playlists.
Efficiency criteria
- Currently, retailers are trying to distinguish themselves from competition by creating a clear brand image. The in-store experience is very important for customers. In developing customer centric playlists, the companies establish their brand image. This is an important strength in the business model of Atmosphere.
- Streaming music in shops is not free, the retailers have to pay a licensing fee for copyrights. Atmosphere is aware of this legal aspect and even anticipates to this by offering their clients the service to arrange this for them to avoid difficulties.
In conclusion, I think that Atmosphere has a bright future ahead. The perseverance of the founders seems to pay off and as the company raises more awareness, the customer base will continue to grow. The streaming business will keep rising and Atmosphere must try to rise along. If the company succeeds to eventually found a community to collect playlists, the possibilities are endless.
Sources:
Tsekouras, D. (2016), Lecture 1: Introduction to value co-creation, Rotterdam School of Management.
https://fd.nl/morgen/1191244/geld-verdienen-met-playlists-maken-dat-idee-sloeg-aan
Consumer Value Creation 