Spotify changed music industry

When Spotify founder Daniel Ek grows up in a working-class neighborhood in the Swedish capital Stockholm, he is disappointed that he does not have enough money to buy all his favorite music. As a teenager his dream, “an extensive music archive at your fingertips”, starts to form in his head…. About 15 years after the founding of Spotify in 2005, the company has grown into one of the most important players in contemporary music. Ek is now a multi-millionaire and Spotify has a market value of approximately 21 billion euros.

Streaming from illegal to legal

You can call the success of Spotify quite remarkable. The Swedish company was certainly not the first to try out the concept of ‘streaming music’. Napster was already launched in the late 90s of the last century. The peer to peer network at one point had many millions of users. Kazaa also managed to attract a lot of users. The big problem with these networks, however, was that they did not have the rights to the music you could listen to there. Under pressure from the music industry, these old streaming platforms eventually had to close their websites.

Deal with the music industry

Funny detail is that Spotify once started with a large online collection of illegally copied MP3s. Daniel Ek soon realized that as a platform you would never make it if you do not get the record companies behind you. His goal was to convince them that Spotify would be the salvation of the music industry and a weapon in the fight against illegal music copying. Ek does his utmost to close deals with the major record companies Universal, Sony Music and Warner. The book sheds a glimpse into how these deals came about.

Sony Music becomes shareholder

It wasn’t that easy; it took the Swedish company about 5 years before the first deal with Sony Music was a fact. Internal documents show that Sony made it a condition that it could buy 2.5% of the shares at a reduced price. Sony paid about 72 million euros for these shares. The market value has now risen to almost two billion euros. Thanks to this ‘secret deal’, Sony is still the record company with the largest share in Spotify, you can read in the book.

Steve Jobs:  “Why do you want to give music away for free?”

The book also examines the role that Steve Jobs from Apple played in Spotify’s early years. Jobs saw the danger of his lucrative music service i-Tunes. His new service was revolutionary enough already, offering music lovers the opportunity not to buy entire albums, but just download their favorite songs. According to Jobs, the music industry would declare its own bankruptcy if they would also free streaming. He is said to have regularly whispered to record companies: “Why do you want to give music away for free?

What are the consequences of the Spotify revolution?

According to some critics, Spotify has made music a disposable object. The romance of looking for an LP or CD in a record store has mostly disappeared. On the other hand, Ek’s ideal, ‘a large music collection within reach’, has now become reality. Music lovers nowadays have the opportunity to browse through the history of music. Spotify also offers an excellent opportunity for independent artists to release their own music. The authors of the book are also guessing about the significance of the Spotify revolution. “In the future, Spotify may become so close to the artist that they will eventually no longer need a record company to distribute their music,” they suggest.

Spotify e-book en paperback

Download Spotify e-book

Spotify e-book and paperback

The book Spotify is about how a small Swedish start-up completely disrupted a multi-billion industry and formed the basis of streaming. Learn how founders Daniel Ek and Martin Lorentzon ultimately saved record companies from pirates and led Apple to change its business model. This is the first book of its kind with the full story of the company and contains never-before-disclosed material on making spectacular deals and the IPO. About Mark Zuckerberg, Steve Jobs, Jay Z, Jimmy Iovine, Sean Parker, among others. And with special revelations about Tidal, Soundcloud, Google and Microsoft.  Spotify paperback

Also interesting: Spotify Teardown

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.