The growth of Spotify: From the beginning to reaching billions in worth

Founded in 2008, the Swedish company has grown tremendously over the years. Let’s find out how the company has become the biggest streaming platform in the world so quickly:

Spotify was founded by IT engineer Daniel Ek and entrepreneur Martin Lorentzon as a small start-up in Stockholm, Sweden. They were very much concerned with the never-ending piracy issue in the music industry at that time. So they developed the platform in 2006 that could be the answer to that problem.

The Spotify that we know today was launched 2 years later. Initially, the platform offered free music streaming services with advertisements. Their objective was to convert the free users to the £10 a month ad-free subscription.

Before the concept of streaming services came, most people used file-sharing sites like LimeWire, Napster, and The Pirate Bay to download music. These services have always been controversial as they discouraged users to buy music. The music industry experienced losses of millions of dollars each year as their sales dropped tremendously.

Daniel Ek said in 2010 that he realized people can never legislate away from piracy. He thought that the only way to remove the problem was to create an alternative service that was way better than piracy and profitable for the music industry at the same time.

He even had a hunch that his streaming service would flourish and be worth tens of millions in the future.

The competitions

No industry is free of rivals. Soon after the launch of Spotify, many other streaming services came into existence.

The primary rival of Spotify Apple Music stepped into the scene in 2015. It even made exquisite deals with the biggest artists like Taylor Swift, Drake, and Frank Ocean to stream their music first on the platform. And iTunes store had allowed the users to download an album or song by paying for that particular item.

Apple Music brought the concept of monthly subscriptions first. It offered unlimited access to the vast library of music to the users with their monthly subscription.

Soon SoundCloud also joined the bandwagon and introduced a new monthly subscription pack called SoundCloud Go in 2016 to counter Spotify. SoundCloud started as a platform for new and unsigned musicians to a paid music streaming platform. But the platform has only half of the top label music that is found on Spotify. Also the sound clarity and quality are way better on Spotify in comparison.

Controversies

Spotify has gained tremendous success in the music industry but had experienced its fair share of controversies over the years.

Most of the music on Spotify is either from major labels or independent artists. It pays the artists, songwriters, and record labels royalties for their streaming music.

Taylor Swift was one of the first musicians who spoke against Spotify in that matter to the public. She called out the platform on how much they pay the artists and called the entire platform an ‘experiment’.

She said that she was not willing to contribute her entire life’s work to an experiment. She claimed that she did not feel the musicians, writers, producers, and creators were compensated fairly for their music.

Spotify later said that they hoped Taylor Swift would change her mind and join them to establish a new music economy ideal for everyone.

Jay Z also said similar things about the platform and launched his own subscription-based music streaming service Tidal in 2016.

The Future

Spotify is bringing many changes to its services as time progresses. Like Apple Music, it is also more interested in putting live events. Spotify is set 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.