What can you do if you are sick of piracy and love music?
Why, start a 97-billion-dollar company of course!
That was the primary reason for the conception of Spotify, says Daniel Ek, co-founder and current CEO of Spotify. Granted, the company had more humble beginnings than that. In 2006, Spotify was launched as a small start-up in Sweden. Ek said that he realized that you can never legislate away piracy and much like the reasoning behind Apple Music in 2015, the only way to disrupt piracy was to provide a better service for both consumers, artists and labels.
Being first to market in this area gave them a head start that has really paid off in terms of popularity. Even among the Apple fanbase, Spotify often reigns supreme. With 31% of the global market for music streaming, it is just over double that of Apple Music, which is at 15%. Part of this disparity is because of how Spotify lets users create a free trial. Spotify allows users to create a complete account with no limits on time or amount of music to listen to. The catch is that you have to listen to advertisements every so often and you cannot skip too many songs or it locks you from skipping more. This gets people in the gate right away and really just annoys them until they sign up.
However, there is an aspect of business that Spotify has been losing out on and could even lead to potential market loss in the future. One thing that Apple Music, Amazon Music and even YouTube Music to some extent have is products that benefit their respective services. Spotify has had the benefit of being the first mover, but they don’t have anything other then the streaming service itself. That is enough for at least 31% of consumers, but what about the remaining 69%? There is always from for improvement and always a way to curate more innovation.
I did not expect to see a post about Spotify! I have not studied the story of Spotify before, and your retelling was very informative. In addition, I appreciate your insights in the last paragraph. I believe Spotify should look at the statistics and not get caught up in being the first mover. Just because they are the first mover does not guarantee that they will remain on top, as has been shown time and time again.
Spotify is an interesting business and the stats are a really interesting addition to how it took over and became the top platform. I’m interested to see how the business grows as it becomes less and less accessible to people.
It’s cool how Spotify grew by giving people a legal way to listen to music instead of pirating it. The free trial with ads is a smart way to get people to start using it, even if the ads are annoying sometimes. I think it is interesting what you said in the last paragraph about while Spotify was the first mover, they still have a lot of room for innovation that needs to happen.