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Daniel Ek started Spotify, a Swedish audio streaming and media services company, in 2006. As of March 2021, it has over 356 million monthly active users, including 158 million paying subscribers, becoming it the world’s largest music streaming service provider.
Spotify delivers digital copyright-restricted recorded music and podcasts from record labels and media organizations, including over 90 million songs. Basic functions are free with advertising and limited control as a freemium service, while extra capabilities, including as offline listening and commercial-free listening, are available for a fee. Users may create, update, and share playlists and search for music by artist, album, or genre.
In much of Europe and the Americas, as well as Oceania and portions of Africa (including South Africa and Mauritius) and Asia, Spotify is available. Spotify is scheduled to be available in 178 countries by the end of 2021. Most current devices, including Windows, macOS, and Linux PCs, iOS and Android smartphones and tablets, and AI-enabled smart speakers like Amazon Echo and Google Home, are compatible with the service.
Spotify pays royalties depending on the amount of artist streams as a percentage of all songs streamed, as opposed to physical or download sales, which pay artists a fixed fee per song or album sold. It pays out around 70% of its overall earnings to rights holders (usually record labels), who then pay artists according to individual contracts. According to The New York Times’ Ben Sisario, about 13,000 of Spotify’s seven million musicians will earn $50,000 or more in 2020.
Spotify has been accused of pushing its own Swedish musicians through selected playlists, lowering artist discoverability and giving Spotify too much control over their earnings.
Daniel Ek, former CTO of Stardoll, and Martin Lorentzon, co-founder of Tradedoubler, created Spotify in 2006 in Stockholm, Sweden. According to Ek, Lorentzon’s name was yelled and the company’s name was misheard. Later, they devised an etymology based on the words “spot” and “identify.”
Spotify started public registration for the free service tier in the United Kingdom in February 2009. Following the launch of the mobile service, Spotify decided to halt enrollment for the free service in September, reverting to an invitation-only approach in the UK.
In July 2011, Spotify launched in the United States, with a six-month free ad-supported trial period during which new customers may listen to an unlimited quantity of music. The free trial periods began to expire in January 2012, and users were limited to ten hours of streaming per month and five plays each song. Spotify announced in March that all restrictions on the free service tier will be lifted permanently.
In April 2016, Ek and Lorentzon issued an open letter to Swedish legislators requesting action on three issues they said were impeding Spotify’s ability to recruit top talent as the business grew: flexible housing, improved programming and development education, and stock options. To compete in a global market, Ek and Lorentzon argued that lawmakers needed to respond with new regulations, or thousands of Spotify jobs will be relocated from Sweden to the United States.