Sanjae’s Assignment Journal

Market: SoundCloud

Source: https://www.bloomberg.com/news/articles/2017-02-28/soundcloud-undercuts-spotify-with-low-price-plan

SoundCloud, an on-demand music service lowered it’s subscription price from $9.99 per month to $4.99 per month. The demand determinant to describe the 50% drop in price would be Buyer’s Preference/Consumer Taste. SoundCloud had been providing music to users at the same price as their rival Spotify. However, since Spotify also delivers music from record stores and is more accessible to users, customers tend to show a preference towards Spotify. This caused the demand curve of SoundCloud to shift to the left. As a result, SoundCloud faced a decline in the number of customers which would have caused the company to run out of money. To avoid this situation, SoundCloud  lowered it’s subscription price. SUpply And Demand Asisngment

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