Digital Service Platform Evolution: How Spotify Leveraged Boundary Resources to Become a Global Leader in Music Streaming

Abstract

Research on digital platform evolution is largely focused on how platform-owners leverage boundary resources to facilitate and control contributions from external developers to extend the functional diversity and scope of a digital device. However, our knowledge of the digital platforms that carve out their existence exclusively in the service layer of industry architectures, i.e. without proprietary device connections, is limited. The concept of digital service platforms directs attention to such platforms, the role of end-users as value co-creators, and devices as requisite, but not necessarily proprietary, distribution mechanisms for service. Based on a longitudinal case study of Spotify, this paper contributes by demonstrating that digital service platform evolution is characterized by specific architectural conditions that rationalize the use of boundary resources for extending scale rather than scope, and for resourcing and controlling not only developers but also end-users as a means to strategically adjust the evolutionary process.

On open innovation, platforms, and entrepreneurship

“…For example, in 2011, Spotify, still a relatively small firm, created an app store to attract third parties to build a richer ecosystem. However, in 2013, the ecosystem that was “initially leveraged as a way to diversify the service offering by mobilizing external app developers” was closed by Spotify “after a limited number of apps had been cherry‐picked and integrated within the platform” (Skog, Wimelius, & Sandberg, , p. 4570). Such a vulnerability is enhanced because platform owners have significant visibility into the entrepreneurs' business.…”

Digital Disruption

“…As specific manifestations of digital disruption, digitization and digital platforms have, for example, been highlighted as processes or artefacts that can lead to dissolution of core industry conditions for organizing the production and capture of value (El Sawy et al 2010;Karimi and Walter 2015;Tan et al 2015;Berghaus and Back 2016;Rauch et al 2016). Other authors have attributed the origination of digital disruption to specific actors, digital disruptors, that leverage digital technologies to undermine established industry models of consumption, competition and resourcing (Tan et al 2015;Wenzel et al 2015;Elbanna and Newman 2016).…”

“…As exemplified by the range of similar services that have emerged in the wake of Uber (Elbanna and Newman 2016), digital innovations that cause digital disruption may act as both battering rams and role models for imitators. As with Spotify, which provided easy and free access to massive music libraries with the help of peer-to-peer technology in a legal manner (Skog et al 2018), it may also be possible for actors to repurpose deviant logics and their technological materialization to launch new digital disruption processes. In contrast, for actors that have strategically invested and planned according to conditions that are dissolving, digital disruption will likely pose significant challenges.…”

Mapping the Evolving Intellectual Structure of Digital Innovation Research on the Public Sector: A Document Co-citation Analysis

“…While still an emerging line of inquiry, DI literature is currently providing both theoretical and managerial implications that could be useful in research and practice for the public sector. For example, insights on digital service platform evolution [43] should be worth notice by both researchers and practitioners interested in interactive democracy [56] or different types of digital public service platforms.…”