The music industry we see today was not so smooth and easygoing in the ‘00s. Though it was quite cost-efficient for the audience, it was not at all profitable for the people in the music business. The file-sharing platforms like Limewire and Napster made it easy for people to share music files with each other. The songs were previously sold in physical forms such as CDs and vinyl. Suddenly they were shared among peers as digital sound files. Soon illegal piracy started and people could get their hand on any music they wanted for absolutely free. It caused the music industry in the U.S. to lose over half of its value at the beginning of the 21st century. According to RIAA, the revenue dropped from the highest $14.6 billion in 1999 to only $6.7 billion in 2014 and 2015. iTunes made some changes in the contemporary music scene, there was much to do to change the mentality of an entire generation that believed in getting free music.
Spotify brought a revolutionary change in the music industry satisfying the needs of both the audience and the music industry with its innovative tactics. Founded by Swedish entrepreneurs Martin Lorentzon and Daniel Ek on April 23rd, 2006, has successfully resolved the piracy problem of the music industry all over the world. Their U.S launch happened in 2011, presenting huge possibilities for the music scene there. The users do not need to pay for every single music piece or album they listen to. For a monthly charge of as low as $9.99, people can enjoy seamless access to millions of music on the platform. Users can also enjoy them for free but they have to go through dozens of ads interrupting their musical flow. Being an open platform, it can be accessed by anyone. Many independent musicians have achieved success in the mainstream music industry through the platform.
In 2010 Spotify only had a grasp over the 7% of the U.S. music industry. In 2020 it rose to 83%. As per RIAA, the company’s revenue grew tremendously for 5 consecutive years, achieving $12.3 billion. In a way, Spotify has saved the global music industry by establishing stability in the market. The digital service provider will be celebrating its 15th anniversary this month. Here are the 15 most revolutionary ways that the platform has changed the global music industry for good.
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Decreased piracy:
The peer-to-peer sound file-sharing facility offered by Limewire, Napster, and other such platforms has led to building an empire of illegal downloading and piracy in the ‘00s. The mainstream music industry could not keep it under control no matter how hard they tried. Spotify made legal streaming as easy as pirating, making people more inclined to use its services. Their awareness campaigns made people understand the value of the hard work of the musicians so that they learn to pay for their favorite music again. As per the study of market researcher YouGov, music piracy was 10% in 2018 from 18% in 2013. 22% of the illegal downloaders even pledged to stop completely within 5 years.
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Offered versatility:
The habit of pirating music became so rampant because it was quite expensive back in the days. People had to buy an entire album, even they only wanted to listen to just one song in it. They mostly spent almost $20 to buy an album with only one or two songs. Spotify on the other hand offers a diverse range of music at a $9.99 subscription per month. They can explore through the millions of songs available there and listen to whichever they want. According to a 2019 survey, there is no specific category or genre that the contemporary generation listens to. The dynamic versatility offered by the platforms enables them to enhance their true thematic taste.
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Free music:
The reason illegal downloading became so popular because it was free. Those sites were full of spam and ads, but still, people preferred those so that they didn’t have to pay anything. Spotify also offers free music streaming but it is laden with numerous advertisements. The free tier has conversed many to paid subscribers, which has now crossed 155 million in the fourth quarter of last year. In a survey, the company also found that the playlists created by the free subscribers have helped them display the right advertisement to the users. The free subscription has only caused a 9% revenue loss for the company in 2020.
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Playlists based on moods:
Spotify has always introduced newer ways to engage the audience. The expert editorial team at the website has refused to be bound by the traditional ways of categorizing music based on their genres. They are the ones who first sorted music based on our moods. It is the best solution for music lovers, who do not want to be limited to a single musical form. The multi-genre playlists offer a series of different soundtracks for your happy, sad, optimistic, and many other moods.
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Autoplay:
Autoplay is an evolutionary concept in the music scene that did not exist before. iTunes and other digital music platforms only provided limited libraries for users. There were not many ways that a user can get the suggestion of new content without purchasing to bulk up their personal music library. Spotify has a unique algorithm that suggests newer and relevant content to the users after they have finished their current playlist or album. Spotify is the first website that made autoplay popular among the audience with its accurate suggestions. The autoplay feature can now be found in all the streaming platforms today, thanks to Spotify.
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Ended Apple’s monopoly:
The legal digital music industry was once ruled solely by Apple. In 2001, the company launched iPod, and two years later they brought iTunes into the market. Without a proper competitor in the scene, in 2009 it grasped nearly 69% of the entire digital sales market. One of its competitors, Amazon MP3 held only 8% of the entire market at the same time. In 2016, the music streaming market finally suppressed Apple’s digital download numbers. Spotify obtained 44% of the global music market in the second quarter of 2016 with Apple lagging behind with just 19%. Spotify holds the top spot among all the streaming platforms with 34% of the world’s streaming market in 2020.
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Made musicians and playlist curators famous:
The team of playlist curators at Spotify creates a huge impact in making a song popular. Most of the listeners rely on these top playlists to get their daily dose of music. Getting placed in those playlists can make a track viral overnight. The creator of Spotify’s one of the top playlists, Rap Cavier, Tuma Basa became hugely popular. He switched to YouTube Music getting a better deal in 2018. New Zealand pop-star Lorde became a star after she was featured in Sean Parker’s Spotify playlist, Hipster International. Psychedelic pop band Glass Animals and singer Anne-Marie also became musical sensations because of Spotify and its playlists.
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Personalized year-end review:
The year-end recap has become quite common among all the digital streaming platforms. But it was Spotify, who introduced it first. The platform first did its ‘Year in Music’ in 2015. It was revitalized as ‘Spotify Wrapped in 2016’. Every December, they release the Wrapped lists for every Spotify user. The social media pages are filled with people’s Wrapped lists at that time of the year. Apple Music also started their own rendition of the feature, naming it ‘Replay’ in 2019. Tidal also released ‘My 2020 Rewind’ following the same concept. The ‘Spotify Wrapped’ enables the platform to advertise itself for free of cost.
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Credits songwriters and producers:
The songwriter, producers, sound engineers, and others used to get credited for their hard work in the post-digitized era. They were perfectly acknowledged in the CD booklets or album covers. But in the digital platforms, there is no place for those acknowledgments. The listeners needed to search on Google to know about them. Spotify is the first audio-only music streaming platform that features public credits starting from February 2018. You can learn the name of the songwriter from their Written By section. Tidal followed suit in 2019 and has become the best platform to offer a wide range of credits from musicians producers to songwriters and engineers.
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The hate comment policy:
Every online platform is plagued by the hateful comments of the users. Spotify has guidelines regarding this matter. The company opposes any kind of hateful content that attacks an individual or artist for their race, sex, identity, ethnicity, sexual orientation, disability, and more. The company also tried to implement it on the artists as well. It removed R.Kelly from the platform over sexual allegations against him in 2018. But other artists with criminal charges like convicted murdered Phill Spector still remain on the platform. The online service has admitted that its policy has some flaws. And they will be working on it.
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Spotify Clips:
The artists on the platform now can share their stories with the audience through its new feature, ‘Spotify Clips’. The feature can be used by clicking on the circular icon present at the top left portion of playlists. The artists need to record a short video and share it with their fans on social media sites such as Facebook, Instagram, Twitter, or Snapchat. That way the audience will feel more connected with the musicians.
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Donations:
The global music industry has been tremendously impacted by the COVID-19 pandemic. Due to the worldwide lockdown, almost all the musical events were canceled. Musicians had to postpone their projects or release them online. This has led to a huge loss. To help the musicians fight the devastating situation, Spotify has included a new feature that allows the fans to donate directly to the artists. The money donated by the fans either goes to a charity that the artists have chosen or to the artists themselves. Though some Chinese streaming services like Kuwo, QQ Music, and Kugou had already started this movement, Spotify was the first to launch it worldwide.
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Mini videos:
Visuals are more appealing to the mass compared to only audio. Utilizing this knowledge, Spotify has launched a new tool named Spotify Canvas that allows musicians to upload a short video loop that accompanies the songs. Though it was released a few years ago for some musicians, the company has officially launched it in February this year. The videos have to be 5 to 8 seconds long and they will be played in a loop till the song ends. As per the survey conducted by Spotify, 5% of the listeners are more inclined to stream, 9% are interested to visit the artist’s profile, and 20% are likely to include the song on their playlists while using Spotify Canvas.
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Licensing music for podcasts:
Spotify has been trying to come up with a tool that allows podcasts to mix relevant music with its playlist, Your Daily Drive. It had both news report podcasts and songs from the user’s personal listening history. Spotify’s podcast platform Anchor has launched a new feature that permits podcaster to combine any full track from Spotify’s library in their programs, without the need for licensing. The podcasters will be free of the expensive licensing process with the new launch.
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Targeted ads:
Spotify had launched a brand new marketing tool for the musicians in October 2019. The advertising platform named Marquee charges the artist for its sponsored recommendation tool that targets the right audience for the artists. Marquee has proved to increase 20% click-through rate with its expert strategies. These ads are also the most profitable revenue streams on Spotify right now. It has a rate of 55 cents for every click-through. The service has caused some controversy. Many are calling it a form of payola in the streaming industry.