The growth of Spotify: from start to billions of dollars
Spotify is the leading digital music streaming platform today. Its current value is over $ 23 billion. The platform has good news for fans as it has decided to trade its shares in public. The papers to do so on the New York Stock Exchange have already been filed.
Spotify is currently used by 61 countries around the world. It has a user base of 159 million with a collection of 35 million tracks.
Founded in 2008, the Swedish company has grown significantly over the years. Let’s find out how the company became the world’s largest streaming platform so quickly:
Spotify was founded by computer engineer Daniel Ek and entrepreneur Martin Lorentzon as a small start-up in Stockholm, Sweden. They were very concerned about the never-ending problem of piracy in the music industry at that time. They therefore developed the platform in 2006 which could be the answer to this problem.
The Spotify we know today launched 2 years later. Initially, the platform offered free music streaming services with advertisements. Their goal was to convert free users to an ad-free subscription of Â£ 10 per month.
Before the concept of streaming services came along, most people used file sharing sites like LimeWire, Napster, and The Pirate Bay to download music. These services have always been controversial because they discourage users from purchasing music. The music industry has suffered losses of millions of dollars every year as its sales have fallen dramatically.
Daniel Ek said in 2010 that he realized that people can never legislate against piracy. He believed that the only way to solve the problem was to create an alternative service that was much better than pirating and profitable at the same time for the music industry.
He even had a hunch that his streaming service would thrive and be worth tens of millions in the future.
No industry is exempt from competitors. Soon after Spotify launched, many more streaming services sprang up.
Spotify’s main rival Apple Music entered the scene in 2015. It even made exquisite deals with top artists like Taylor Swift, Drake, and Frank Ocean to release their music first on the platform. And iTunes Store had allowed users to download an album or song by paying for that particular item.
Apple Music introduced the concept of monthly subscription first. It offered unlimited access to the vast music library to users with their monthly subscription.
Soon, SoundCloud also joined the movement and introduced a new monthly subscription pack called SoundCloud Go in 2016 to counter Spotify. SoundCloud started out as a platform for new and unsigned musicians to a paid music streaming platform. But the platform only has half of the music from the top labels found on Spotify. Plus, the clarity and sound quality is much better on Spotify in comparison.
Spotify has been hugely successful in the music industry, but has seen its fair share of controversy over the years.
Most of the music on Spotify comes from either major labels or independent artists. It pays artists, songwriters and record companies royalties for their streaming music.
Taylor Swift was one of the first musicians to speak out against Spotify in public on this matter. She called the platform on the amount she was paying artists and called the entire platform an “experience.”
She said she was unwilling to contribute her whole life’s work to an experience. She said she didn’t think musicians, writers, producers and creators were paid fairly for their music.
Spotify later said they hoped Taylor Swift would change her mind and join them in establishing a new music economy that’s great for everyone.
Jay Z has also said similar things about the platform and launched his own subscription music streaming service Tidal in 2016.
Spotify makes a lot of changes to its services over time. Like Apple Music, he’s also more interested in setting up live events. Spotify is expected to face more completion in the future with Apple, Amazon, and Google developing their own streaming services. It is still the most popular streaming platform across the world.
Jennifer Stone turned her love of music to writing. She is one of the Daily Music Roll writers and is engaged in creating positive reviews, music blogs and music press releases for various artists here.