What you need to know about: Spotify

Is the Swedish streaming star a saint or sinner? You decide.

by Andrew Saunders
Last Updated: 18 May 2017

Formative years

Stockholm, 2006, and disillusioned former dotcommers Daniel Ek and Martin Lorentzon decide to save the music business from annihilation by iPod (remember those?). MP3 piracy had driven the industry to the brink, but the pair reckoned music fans were not crooks at heart and would do the right thing, if that thing was also better and more convenient. Thus was streaming service Spotify born.

Only one snag - their 'freemium' online music library, with millions of songs funded by advertising and subscriptions, relied on persuading the big labels to give away the stuff that punters had traditionally paid them for. Not easy, but as Ek himself noted of the time, 'The industry was in the shitter. What did they have to lose?'

Recent history

A decade on and Spotify is the biggest hit to come out of Sweden since Abba. 100 million users, 50 million of them paying, big content deals with all the majors and an $8bn valuation. It's turned music from a product into a service, and become the soundtrack to our lives.

Of course, there are no signs of it making a profit, but what self-respecting tech Unicorn does? A flotation finally looks set for later this year, although it is rumoured that Spotify will eschew the usual slow and expensive IPO in favour of a cheap and cheerful direct listing.

Read more: How the music industry got its mojo back

But complaints that it just doesn't pay musicians enough refuse to go away, and Radiohead frontman Thom Yorke famously likened the industry support of Spotify to 'The last fart of a dying corpse.'

Who's in charge?

That self -same Daniel Ek is now CEO and chairman, and 10 years in the hot seat seem only to have sharpened his ambition. 'I want anyone to be able to listen to anything,' he has said. Reticent in a business noted for larger than life characters, Ek is nevertheless a visionary whose success depended on his refusal to take 'no' for an answer.

Don't mention...

Competition. The days when Spotify was the only kid on the block are long gone, and Amazon, Apple and Google are all moving hard on streaming. Time to turn the motivation up to 11.

Revenues*: EUR1.5bn
Users: 100m
Loss*: EUR173m
Employees: circa 1,600


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