Spotify Student Innovation Award 2014 Lauren Gil – Copenhagen Business School

Establishing a partnership with MapMyFitness

IMAGE:  Tesco  Living  

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“ If Facebook owns social, if LinkedIn owns business, who owns your health? ”

-­‐  Kevin  Plank,  CEO  of  Under  Armour  

Between December 2013 and June 2014…

general mobile apps usage grew by 33%,

whereas health/fitness apps grew by 62%

SOURCES:  Business  Insider,  Flurry  Research,  Mobiquity,  Polka  Dot  Impressions    

Researchers predict that by 2017…

30% of all U.S. consumers will wear fitness technology to

track health

The largest group using fitness apps…

fall within the age range of 21-39 years.

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Overview of the Fitness and Health App Space

SOURCES:  HIS,  iTunes  App  Store,  Mobi  Health  Watch      

The steep growth rate of fitness and health app usage, the increase in fitness wearable technology adoption, and the large percentage of young adults using fitness apps show that entering the fitness and health technology market poses a high return on investment in this industry, which experienced a 10% CAGR over the last 3 years. The industry also provides an unique avenue to expose Spotify to more potential users in the Millennial target market, who use their smartphones for health and fitness apps twice as much as any other age group.

A closer look at the competitive landscape of free fitness and health apps

RunKeeper (33,642 reviews)

MapMyRun (112,568 reviews)

MyFitnessPal (420,605 reviews)

Nike+ Running (43,528 reviews)

Fitbit (26,788 reviews)

So why MapMyFitness? Competitive advantages: •  The app has multiple platforms:

MapMyRun, MapMyHike, MapMyWalk, and MapMyRide

•  Unlike RunKeeper and Nike+Running, MapMyRun also enables a nutrition log book and gear tracker to tell you when you need a new pair of shoes

•  Recent acquisition of the company by Under Armour provides a new level of exposure to potential users

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Spotify’s Partnership with MapMyFitness

SOURCES:  MapMyFitness  website,  Business  Insider,  Flurry  Research    

is a fitness brand that launched in 2007 as a conglomerate of cloud-based platforms within mobile apps, all of which allow users to take advantage of geo-mapping technologies to track and store their daily exercises into an online database. MapMyFitness also provides a wide range of complimentary features, such as a nutrition calculator, community-based social network, a database of exercise routes around the world, and other fitness training tools. With over 20 million registered users in a growing expected industry value of $5 billion by 2016, MapMyFitness has made its mark as a frontrunner in its industry. Also, with the increasing democratization of smartphones, more people will have access to the mobile app space. In 2013, a rising athletic brand, Under Armour, acquired the company with a mission to enhance the digital fitness platform in conjunction with wearable technologies.

How MapMyFitness and Music Relate

MapMyFitness apps also allow users to simultaneously use music apps or play music from their smartphone’s music library while still tracking the distance, speed, time, and calories burned, etc. of their workout.

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Enhanced User Experience with Spotify

SOURCES:  SpoOfy  Mobile  App  

Currently, MapMyFitness mobile app users can play music straight from their smartphone’s music library or instantaneously run a music app like Spotify while also using MapMyFitness. However, a partnership between Spotify and MapMyFitness can provide the following unprecedented benefits: •  Streamlined music capabilities embedded in

MapMyFitness where users can listen to their Spotify playlists directly on MapMyFitness without having to switch between applications

•  Access to playlists curated by Spotify professionals for various types of workouts

•  Share music playlists used during a workout with friends on the MapMyFitness Activity Feed

Simpler, faster, and more personalized workout experiences for all MapMyFitness app users

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How does this partnership help Spotify?

SOURCES:  MapMyFitness  website,  Under  Armour,  Flurry  Research    

•  Spotify can expose new users to its mobile app and defer them from other popular apps such as Pandora or 8tracks through a potential exclusive partnership deal where all users automatically default to using the Spotify

•  As people from ages 25-34 use fitness health apps 41% more than the average user, Spotify can target this large demographic for sustainable growth

•  Spotify can leverage the data from MapMyFitness users to better determine listening habits and preferences of fitness-oriented Spotify users

40 million active Spotify users

20 million active MapMyFitness

users upwards of 60 million total Spotify users

33% larger pool of Spotify mobile app users

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Why would MapMyFitness partner with Spotify?

SOURCES:  SpoOfy,  Sprint,  Under  Armour  

After being recently acquired by Under Armour, MapMyFitness is benefiting from their strategic direction, resources, development, and capital investments. Under Armour is currently working on improving a line of wearable fitness technologies and creating an integrated fitness tech platform. The following reasons explain the benefits MapMyFitness get from partnering:

With the additional features to share Spotify playlists used when logging a specific workout and to use curated fitness playlists, MapMyFitness can create a more connected community in a world where people are consistently seeking to be more health-conscious and share their fitness accomplishments.

Spotify brings a whole new product differentiation route by providing an integrated approach to music listening while exercising. No health and fitness apps allow for this experience, which will help MapMyFitness stand out in the highly competitive and saturated health and fitness mobile app industry.

Connectivity 2. Differentiation 1. 3. Relationships

Spotify has already worked with MapMyFitness through the Sprint Fit Live platform – building a partnership with Under Armour as the parent company should be plausible due to the relationships already established. The new Spotify integration into the MapMyFitness app takes the relationship to the next level.

Long-Term Benefits of the Partnership

SOURCES:  SpoOfy,  CraPing  and  ExecuOng  Strategy,  AdopOon  behavior    

Looking into the future, it’s clear that the fitness and health mobile app space is experiencing huge levels of growth, which will continue with the increasing number of the population who own smartphones. As people search for cheaper ways to exercise and stay fit, consumers have turned to free mobile apps that can “coach” them, and for some, it’s arguable to say that the apps have become a substitute to paying for a gym membership, especially for the early 20’s to mid 30’s Millennial age group who have typically been early adopters in the tech movement.

Spotify’s space to acquire users within the adoption curve

Spotify can leverage on this booming industry by providing a proprietary option and differentiating feature for MapMyFitness, who is facing intense competition from other players such as RunKeeper, Nike+ Running, and Fitbit. With 20 million registered MapMyFitness users to be exposed to, Spotify can expect a gradual adoption in the first 12-months of the partnership. Many of the tech enthusiasts and early adopters and followers of Spotify may have already embraced Spotify mobile and will already be avid users. However, Spotify can target the remainder of pragmatists, conservatives, and skeptics to adopt the music streaming service while exercising and during their daily leisure time, which can account for approximately 14.2 million users – many of whom can be converted from other apps or introduced to the music streaming world. Upon successful execution of this partnership, Spotify can expect increased brand awareness and entrance into a highly saturated market.

14.2 million potential users