Spotify
Spotify (/ˈspɒtɪfaɪ, -tə-/) is a music, podcast, and video
streaming service launched on 7 October 2008. It is developed by
Spotify
Spotify AB in Stockholm, Sweden. It provides DRM-protected content
from record labels and media companies.
Spotify
Spotify is a freemium service;
basic features are free with advertisements or limitations, while
additional features, such as improved streaming quality and music
downloads, are offered via paid subscriptions.
Spotify
Spotify is available in most of Europe, most of the Americas,
Australia, New Zealand, and parts of Asia. It is available for most
modern devices, including Windows, macOS, and
Linux
Linux computers, as well
as iOS,
Windows Phone
.svg/480px-Windows_Phone_8_logo_and_wordmark_(purple).svg.png)
Windows Phone and Android smartphones and tablets.
Music
Music can
be browsed through or searched for by parameters such as artist,
album, genre, playlist, or record label. Users can create, edit, and
share playlists and tracks on social media, and make playlists with
other users.
Spotify
Spotify provides access to more than 30 million songs. It
had more than 140 million monthly active users as of June 2017, and
more than 70 million paying subscribers as of January 2018.[4]
Unlike physical or download sales, which pay artists a fixed price per
song or album sold,
Spotify
Spotify pays royalties based on the number of
artists' streams as a proportion of total songs streamed. It
distributes approximately 70% of total revenue to rights holders, who
then pay artists based on their individual agreements.
Spotify
Spotify has
faced criticism from artists and producers including
Taylor Swift
Taylor Swift and
Thom Yorke, who argued that it does not fairly compensate musicians.
In April 2017, as part of its efforts to renegotiate license deals for
an interest in going public,
Spotify
Spotify announced that artists will be
able to make albums temporarily exclusive to the Premium service if
they are part of
Universal Music Group
Universal Music Group and Merlin Network.
On 28 February 2018,
Spotify
Spotify filed for direct listing on the New York
Stock Exchange.[5] Spotify's shares began trading on 3 April 2018.[6]
Contents
1 Business model
1.1 Accounts and subscriptions
1.2 Monetization
1.2.1 Funding
1.3 Advertisements
1.4 Downloads
1.5
Spotify
Spotify for Artists
1.5.1 Industry initiatives
2 Platforms
2.1 Features
2.1.1 Playlists and discovery
2.1.1.1
Playlist curators
2.2 Listening limitations
2.3 Technical information
3 Geographic availability
4 History
4.1 Early development
4.2 Launch in 2008
4.3 Early international launches
4.4 Other developments
4.4.1 Streaming records
4.4.2 User growth
4.4.3 Initial public offering
4.4.4 Acquisitions
4.4.5 Company partnerships
4.4.6 Dispute with Apple
5 Accolades
6 Criticism
7 See also
8 References
9 External links
Business model[edit]
Spotify
Spotify operates under a freemium business model (basic services are
free, while additional features are offered via paid subscriptions).
Spotify
Spotify makes its revenues by selling premium streaming subscriptions
to users and advertising placements to third parties.
In December 2013, the company launched a new website, "
Spotify
Spotify for
Artists", that explained its business model and revenue data. Spotify
gets its content from major record labels as well as independent
artists, and pays copyright holders royalties for streamed music. The
company pays 70% of its total revenue to rights holders.
Spotify
Spotify for
Artists states that the company does not have a fixed per-play rate,
instead considers factors such as the user's home country and the
individual artist's royalty rate. Rights holders received an average
per-play payout between $.006 and $.0084.[7]
Spotify
Spotify offers an unlimited subscription package, close to the Open
Music
Music Model (OMM)—estimated economic equilibrium—for the recording
industry. However, the incorporation of digital rights management
(DRM) protection[8] diverges from the OMM and competitors such as
iTunes Store and
Amazon Music
Amazon Music that have dropped DRM.[9][10]
Spotify
Spotify encourages people to pay for music, with subscriptions as its
main revenue source.[7] The subscription removes advertisements and
limits, and increases song bitrates to 320 kbit/s.[11]
The
Spotify
Spotify for Artists website claims that “a
Spotify
Spotify Premium
customer spends 1.6x more per year compared to the average spending of
a U.S. music consumer who buys music (not including those who spend $0
on music)", with the annual value of the average US paying listener
identified as $120. The website also claims that "a
Spotify
Spotify customer
is 1.6x more financially valuable than the average adult non-Spotify
U.S. music consumer."[7]
Additionally, the website also includes a section entitled "Spotify's
impact on piracy" as a response to the criticisms against the company
regarding the exploitation of musicians.
Spotify
Spotify states that it has
proven the theory 'given a free and legal alternative, people will
pirate less', and uses Sweden, Norway, Denmark, the United States,
Netherlands
Netherlands and the
United Kingdom
United Kingdom to provide evidence. For example,
in Norway, the figure of 1.2 billion unauthorised song downloads in
2008 is compared to a figure of 210 million from 2012.[7]
BBC
BBC
Music
Music Week editor Tim Ingham wrote: "Unlike buying a CD or
download, streaming is not a one-off payment. Hundreds of millions of
streams of tracks are happening each and every day, which quickly
multiplies the potential revenues on offer – and is a constant
long-term source of income for artists."[12]
Accounts and subscriptions[edit]
As of June 2016, the three
Spotify
Spotify subscription types, all offering
unlimited listening time, are:
Type
Free of ads
Mobile listening
Enhanced sound quality (up to 320kbps bitrate)
Listen offline
Spotify
Spotify Connect
Spotify
Spotify Free
No
Limited
(shuffle-only mode)
No
No
No
Spotify
Spotify Premium
Yes
Yes
Yes
Yes
Yes
Spotify
Spotify Family
Yes
Yes
Yes
Yes
Yes
In March 2014,
Spotify
Spotify introduced a new, discounted Premium
subscription tier for active students. Students in the United States
enrolled in a university can pay half-price for a Premium
subscription.[13] In April 2017, the Students offer was expanded to 33
more countries.[14][15]
Spotify
Spotify introduced its Family subscription in October 2014, connecting
up to five family members for a shared Premium subscription.[16][17]
Spotify
Spotify Family was upgraded in May 2016, letting up to six people
share a subscription and reducing the price.[18]
Monetization[edit]
In 2007, just after launch, the company made a loss of 31.8 million
Swedish kronor ($4.4 million).[19]
In October 2010, Wired reported that
Spotify
Spotify was making more money for
labels in
Sweden
Sweden than any other retailer "online or off".[20]
Years after growth and expansion, a November 2012 report suggested
strong momentum for the company. In 2011, it reported a near US$60
million net loss from revenue of $244 million, while it was expected
to generate a net loss of $40 million from revenue of $500 million in
2012.[21]
Another income source was music purchases from within the app, but
this was removed in January 2013.[22]
In May 2016,
Spotify
Spotify announced "Sponsored Playlists", a monetisation
opportunity in which brands are able to specify the audiences they
have in mind, with
Spotify
Spotify matching the marketer with suitable music
in a playlist.[23][24]
In September 2016,
Spotify
Spotify announced that it had paid a total of over
$5 billion to the music industry.[25] In June 2017, as part of
renegotiated licenses with
Universal Music Group
Universal Music Group and Merlin Network,
Spotify's financial filings revealed its agreement to pay more than $2
billion in minimum payments over the next two years.[26][27]
As of 2017[update],
Spotify
Spotify is not yet a profitable company.[28]
Funding[edit]
In February 2010,
Spotify
Spotify received a small investment from Founders
Fund, where board member
Sean Parker
Sean Parker was recruited to assist Spotify
in "winning the labels over in the world's largest music market".[29]
In June 2011,
Spotify
Spotify secured $100 million of funding, and planned to
use this to support its US launch. The new round of funding valued the
company at $1 billion.[30]
A Goldman Sachs-led round of funding closed in November 2012, raising
around $100 million at a $3 billion valuation.[31]
In April 2015,
Spotify
Spotify began another round of fundraising, with a
report from
The Wall Street Journal
The Wall Street Journal stating it was seeking $400
million, which would value the company at $8.4 billion.[32] The
financing was closed in June 2015, with
Spotify
Spotify raising $526 million,
at a value of $8.53 billion.[33]
In January 2016,
Spotify
Spotify raised another $500 million through
convertible bonds.[34]
In March 2016,
Spotify
Spotify raised $1 billion in financing by debt plus a
discount of 20% on shares once the initial public offering (IPO) of
shares takes place.[35] The company was, according to TechCrunch,
planning to launch on the stock market in 2017, but is instead
planning on doing the IPO in 2018 in order to "build up a better
balance sheet and work on shifting its business model to improve its
margins".[36]
Advertisements[edit]
Spotify
Spotify offers advertisers ten different types of advertising formats,
described in 2016 as: Branded Moments, Sponsored Playlists, Sponsored
Sessions, Video Takeovers, Audio, Display, Overlay, Homepage
Takeovers, Branded Playlists, and Advertiser Pages. These
advertisements vary in size, type and user engagement.[37]
Branded Moments allow brands to "tell their story over a series of
sequential displays with 100% share-of-voice during the 30-minute
session" by using "an immersive vertical video" and can unlock 30
minutes of uninterrupted music.[38]
Sponsored
Playlist is an "exclusive one week sponsorship of
Spotify’s top owned & operated playlists".[39]
Sponsored Sessions allow brands to "offer their audience uninterrupted
listening in exchange for a video view". They are only available on
mobile and tablet devices and are limited to select markets.[40]
Video Takeover is a "video spot with a companion display unit", are
"served during commercial ad breaks between songs in a music session",
and are only available on the computer apps.[41]
Audio Ads are "served during commercial ad breaks between songs in a
music session" with a maximum duration of 30 seconds and play every 15
minutes.[42]
Display Ads are "clickable images displayed for 30 seconds". Display
ads are shown at the bottom of the
Spotify
Spotify client.[43]
Overlay is "Spotify's 'welcome back' ad. It greets returning users on
mobile and desktop with a can't-be-missed, large display ad to
maximize brand impact and performance".[44]
Homepage Takeovers are "a combination of background skin and optional
interactive area that takes over the
Spotify
Spotify homepage".[45]
Branded Playlists are "
Spotify
Spotify playlists that contain a branded cover
art image and text". They can only have one song per artist, and must
have a minimum of 20 tracks in the playlist.[46]
Advertiser Pages are a "microsite seamlessly integrated into the
Spotify
Spotify player", that can "contain practically any content you'd find
on a webpage, including videos, clickable images, blogs, news, links,
and comments."[47]
Downloads[edit]
Starting in March 2009,
Spotify
Spotify offered music downloads in the United
Kingdom, France, and Spain. Users could purchase each track from
Spotify, which partnered with
7digital to incorporate the feature.[48]
However, the ability to purchase and download music tracks via the app
was removed on 4 January 2013.[22]
Spotify
Spotify for Artists[edit]
In November 2015,
Spotify
Spotify introduced a "Fan Insights" panel in limited
beta form, letting artists and managers access data on monthly
listeners, geographical data, demographic information, music
preferences and more.[49] In April 2017, the panel was upgraded to
leave beta status, renamed as "
Spotify
Spotify for Artists", and opening up to
all artists and managers. Additional features include the ability to
get "verified" status with a blue checkmark on an artist's profile,
receiving artist support from Spotify, and customising the profile
page with photos and promoting a certain song as their "pick".[50][51]
Industry initiatives[edit]
In June 2017, Variety reported that
Spotify
Spotify would announce "Secret
Genius", a new initiative aimed at highlighting songwriters and
producers, and the effect those people have to the music industry and
the artists' careers. The new project, which will feature awards,
"Songshops" songwriting workshops, curated playlists, and podcasts, is
an effort to "shine a light on these people behind the scenes who play
such a big role in some of the most important moments of our lives.
When the general public hears a song they automatically associate it
with the artist who sings it, not the people behind the scenes who
make it happen, so we thought the title Secret Genius was
appropriate", Spotify's Global Head of Creator Services Troy Carter
told Variety. The first awards ceremony will take place in late 2017,
and is intended to honour "the top songwriters, producers and
publishers in the industry as well as up-and-coming talent".
Additionally, as part of "The Ambassador Program", 13 songwriters will
each host a Songshop workshop, in which their peers will
collaboratively attempt to create a hit song, with the first workshop
to take place in
Los Angeles
Los Angeles sometime in June 2017.[52]
In October 2017,
Spotify
Spotify launched "Rise", a new program aimed at
promoting emerging artists.[53][54]
Platforms[edit]
Spotify
Screenshot
"Clearest Blue" by CHVRCHES currently being played in the
Spotify
Spotify for
iOS app.
Developer(s)
Spotify
Spotify Technology S.A (
Spotify
Spotify AB)
Initial release
7 October 2008 (2008-10-07)
Stable release(s) [±]
Android
8.4.46.575 / 22 March 2018; 15 days ago (2018-03-22)[55]
Android Wear
7.6.0.1153 / 17 March 2017; 12 months ago (2017-03-17)[56]
iOS
8.4.46 / 26 March 2018; 11 days ago (2018-03-26)[57]
Windows
1.0.77.338 / 26 March 2018; 11 days ago (2018-03-26)[58]
macOS
1.0.77.338 / 26 March 2018; 11 days ago (2018-03-26)[59]
Linux
1.0.77.338 / 26 March 2018; 11 days ago (2018-03-26)[60]
Preview release(s) [±]
Android
8.4.32.617 / 13 December 2017; 3 months ago (2017-12-13)[61]
Linux
1.0.77.338 / 26 March 2018; 11 days ago (2018-03-26)[62]
Development status
Active
Written in
Primarily Python, with some Java, C, and
C++
C++ components[63]
Operating system
Android, iOS, Windows, macOS and Linux
Type
Music
Music streaming
License
Proprietary
Website
www.spotify.com
Spotify
Spotify has apps available for Windows, macOS, and
Linux
Linux computers,
along with Android, iOS, and
Windows Phone
Windows Phone smartphones and
tablets.[64] It also has a proprietary protocol known as "Spotify
Connect", which lets users listen to music through a wide range of
entertainment systems, including speakers, receivers, TVs, cars, and
smartwatches.[65]
Spotify
Spotify also features a web player, for those who
are unable to – or do not want to – download any app.[66] Contrary
to the apps, the web player does not have the ability to download
music for offline listening. In June 2017,
Spotify
Spotify became available as
an app through Windows Store.[67][68]
Features[edit]
On Spotify's apps, music can be browsed or searched for via various
parameters, such as artist, album, genre, playlist, or record label.
Users can create, edit and share playlists, share tracks on social
media, and make playlists with other users.
Spotify
Spotify provides access to
over 30 million songs.[69][70]
In November 2011,
Spotify
Spotify introduced a
Spotify
Spotify Apps service that made
it possible for third-party developers to design applications that
could be hosted within the
Spotify
Spotify computer software. The applications
provided features such as synchronised lyrics, music reviews, and song
recommendations.[71][72] In June 2012, Soundrop became the first
Spotify
Spotify app to attract major funding, receiving $3 million from
Spotify
Spotify investor Northzone.[73][74] However, after the June 2014
announcement of a Web
API that allowed third-party developers to
integrate
Spotify
Spotify content in their own web applications,[75] the
company discontinued its
Spotify
Spotify Apps platform in October, stating
that its new development tools for the
Spotify
Spotify web player fulfilled
many of the advantages of the former
Spotify
Spotify Apps service, but "would
ensure the
Spotify
Spotify platform remained relevant and easy to develop on,
as well as enabling you to build innovative and engaging music
experiences".[76][77]
In April 2012,
Spotify
Spotify introduced a "
Spotify
Spotify Play Button", an
embeddable music player that can be added to blogs, websites, or
social media profiles, that lets visitors listen to a specific song,
playlist or album without leaving the page.[78][79] The following
November, the company began rolling out a web player, with a similar
design to its computer programs, but without the requirement of any
installation.[66]
In December 2012,
Spotify
Spotify introduced a "Follow" tab and a "Discover"
tab, along with a "Collection" section. "Follow" lets users follow
artists and friends to see what they are listening to, while
"Discover" gives users new releases from their favourite artists, as
well as music, review, and concert recommendations based on listening
history. Users can add all tracks to a "Collection" section of the
app, rather than adding to a specific playlist.[80][81] The features
were announced by CEO
Daniel Ek
_(cropped).jpg/440px-Daniel_Ek_(Interview)_(cropped).jpg)
Daniel Ek at a press conference, with Ek stating
that a common user complaint about the service was that "
Spotify
Spotify is
great when you know what music you want to listen to, but not when you
don't", adding that "20,000" new songs got added to the service on a
daily basis. "You're fighting with 20 million songs on Spotify", Ek
stated.[82]
In May 2015,
Spotify
Spotify announced a new Home start page that would serve
up recommended music, with recommendations improving over time. The
company also introduced "
Spotify
Spotify Running", a feature aimed at
improving music while running with music matched to running tempo
(this feature was removed in March 2018 from Mobile client), and
announced that podcasts and videos ("entertainment, news and clips")
would be coming to Spotify, along with "
Spotify
Spotify Originals" content.
"We’re bringing you a deeper, richer, more immersive Spotify
experience", commented CEO Daniel Ek.[83][84][85][86]
In January 2016,
Spotify
Spotify and music annotation service Genius formed a
partnership, bringing annotation information from Genius into
infocards presented while songs are playing in Spotify. The
functionality is limited to select playlists and was only available on
Spotify's iOS app at launch,[87][88][89] being expanded to the Android
app in April 2017.[90][91]
In May 2017,
Spotify
Spotify introduced
Spotify
Spotify Codes for its mobile apps, a
way for users to share specific artists, tracks, playlists or albums
with other people. Users find the relevant content to share and press
a "soundwave-like barcode" on the display. A camera icon in the apps'
search fields lets other users point their device's camera at the
code, which takes them to the exact content.[92][93][94]
Playlists and discovery[edit]
In July 2015,
Spotify
Spotify launched Discover Weekly, a weekly generated
playlist, updated on Mondays, that brings users two hours of
custom-made music recommendations, mixing a user's personal taste with
songs enjoyed by similar listeners.[95][96] In December 2015, Quartz
reported that songs in Discover Weekly playlists had been streamed 1.7
billion times,[97] and
Spotify
Spotify wrote in May 2016 that Discover Weekly
had reached "nearly" 5 billion tracks streamed since the July 2015
launch.[98]
In August 2016,
Spotify
Spotify launched Release Radar, a personalised
playlist that allows users to stay up-to-date on new music released by
artists they listen to the most. It also helps users discover new
music, by mixing in other artists' music. The playlist is updated
every Friday, and can be a maximum of up to two hours in
length.[99][100][101]
In September 2016,
Spotify
Spotify introduced Daily Mix, a series of playlists
that have "near endless playback" and mixes the user's favourite
tracks with new, recommended songs. New users can access Daily Mix
after approximately two weeks of listening to music through Spotify.
Daily Mixes were only available on the Android and iOS mobile apps at
launch,[102] but the feature was later expanded to Spotify's computer
app in December 2016.[103]
Playlist curators[edit]
As of July 2016[update], Spotify's genre-based playlists are led by
the following curators (in alphabetical order):[104]
Allison Hagendorf – Global Head of Rock Music
Austin Kramer – Global Head of Dance & Electronic Music
John Marks – Global Head of Country Music
Mike Biggane – Global Head of Pop
Mjeema Pickett – Global Head of R&B
Rocío Guerrero Colomo – Global Head of Latin Music
Tuma Basa – Global Head of Hip Hop
Listening limitations[edit]
Spotify
Spotify has experimented with different limitations to users'
listening on the Free service tier.
In April 2011,
Spotify
Spotify announced via a blog post that they would
drastically cut the amount of music that free members could access,
effective 1 May 2011. The post stated that all free members would be
limited to ten hours of music streaming per month, and in addition,
individual tracks were limited to five plays. New users were exempt
from these changes for six months.[105][106] In March 2013, the
five-play individual track limit was removed for users in the United
Kingdom, and media reports stated that users in the United States,
Australia
Australia and
New Zealand
New Zealand never had the limit in the first
place.[107][108]
In December 2013, CEO
Daniel Ek
Daniel Ek announced that Android and iOS
smartphone users with the free service tier could listen to music in
Shuffle mode, a feature in which users can stream music by specific
artists and playlists without being able to pick which songs to hear.
Mobile listening previously was not allowed in
Spotify
Spotify Free accounts.
Ek stated that "We're giving people the best free music experience in
the history of the smartphone."[109][110]
In January 2014,
Spotify
Spotify removed all time limits for Free users on all
platforms, including on computers, which previously had a 10-hour
monthly listening limit after a 6-month grace period.[111][112]
Technical information[edit]
Spotify
Spotify is proprietary and uses digital rights management (DRM)
protection.[8] Spotify's terms and conditions do not permit users to
reverse-engineer the application.[113]
Streams are in the Ogg
Vorbis
Vorbis media format at 96 kbit/s for "Normal"
quality on mobile, 160 kbit/s for "High" quality on mobile and
standard quality on desktop computers and the web player, and 320
kbit/s for "Extreme" quality on mobile and high quality on desktop
computers, and is only available for Premium subscribers.[114]
"Extreme" quality is not available in Spotify's web player.
Spotify
Spotify allows users to add local audio files for music not in its
catalogue into the user's library through Spotify's desktop
application, and then allows users to synchronise those music files to
Spotify's mobile apps or other computers over the same
Wi-Fi
Wi-Fi network
as the primary computer by creating a
Spotify
Spotify playlist, and adding
those local audio files to the playlist. Audio files must either be in
the .mp3, .mp4 (.mp4 files that have video streams are not supported),
or .m4p media formats. This feature is available only for Premium
subscribers.[115]
Spotify
Spotify has a median playback latency of 265 ms (including local
cache).[116]
In April 2014,
Spotify
Spotify moved away from the peer-to-peer (P2P) system
they had used to distribute music to users. Previously, a desktop user
would listen to music from one of three sources: a cached file on the
computer, one of Spotify’s servers, or from other subscribers
through the P2P system. P2P, a well-established Internet distribution
system, served as an alternative that reduced Spotify's server
resources and costs. However,
Spotify
Spotify ended the P2P setup in 2014,
with Spotify's Alison Bonny telling TorrentFreak: "We’re gradually
phasing out the use of our desktop P2P technology which has helped our
users enjoy their music both speedily and seamlessly. We’re now at a
stage where we can power music delivery through our growing number of
servers and ensure our users continue to receive a best-in-class
service."[117]
Geographic availability[edit]
Map of the countries in which
Spotify
Spotify is available.
Spotify
Spotify is currently available across 65 markets worldwide.[118]
History of expansion
Date
Countries/Regions
Reference(s)
October 2008
Finland
France
Norway
Spain
Sweden
[119]
10 February 2009
United Kingdom
[120]
18 May 2010
Netherlands
[121]
14 July 2011
United States
[122][123]
12 October 2011
Denmark
[124][125]
15 November 2011
Austria
[126]
16 November 2011
Belgium
Switzerland
[127]
13 March 2012
Germany
[128]
22 May 2012
Australia
New Zealand
[129][130]
13 November 2012
Andorra
Ireland
Liechtenstein
Luxembourg
Monaco
[131][132][133]
12 February 2013
Italy
Poland
Portugal
[134]
16 April 2013
Estonia
Hong Kong
Iceland
Latvia
Lithuania
Malaysia
Mexico
Singapore
[135][136]
24 September 2013
Argentina
Greece
Taiwan
Turkey
[137][138]
12 December 2013
Bolivia
Bulgaria
Chile
Colombia
Costa Rica
Cyprus
Czech Republic
Dominican Republic
Ecuador
El Salvador
Guatemala
Honduras
Hungary
Malta
Nicaragua
Panama
Paraguay
Peru
Slovakia
Uruguay
[139][140]
8 April 2014
Philippines
[141]
28 May 2014
Brazil
[142]
30 September 2014
Canada
[143]
30 March 2016
Indonesia
[144]
29 September 2016
Japan
[145]
22 August 2017
Thailand
[146][147]
12 March 2018
Israel
Romania
South Africa
Vietnam
[148][149][150][151][152]
History[edit]
Early development[edit]
Daniel Ek
Daniel Ek addressing
Spotify
Spotify staff
Spotify
Spotify was developed in 2006[153] by a team at
Spotify
Spotify AB, in
Stockholm, Sweden. The company was founded by Daniel Ek, former CTO of
Stardoll, and Martin Lorentzon, co-founder of TradeDoubler. The
company's title, according to Daniel Ek, was initially misheard from a
name shouted by Martin Lorentzon. Later they thought out an etymology
of a combination of "spot" and "identify".[154]
Spotify
Spotify
Sweden
Sweden AB,
headquartered in Stockholm, Sweden, handles research and
development.[155] The company is a subsidiary of
Spotify
Spotify LTD, a
company headquartered in London, United Kingdom,[156] which in turn is
a subsidiary of
Spotify
Spotify Technology SA, headquartered in
Luxembourg.[157]
Spotify
Spotify has offices in 20 countries as of November
2016.[158]
Launch in 2008[edit]
Spotify's original logo (2008–2012)
The
Spotify
Spotify application was launched on 7 October 2008. While free
accounts remained available by invitation to manage the growth of the
service, the launch opened paid subscriptions to everyone. At the same
time,
Spotify
Spotify AB announced licensing deals with major music
labels.[159]
Early international launches[edit]
Former
Spotify
Spotify headquarters in Stockholm
In February 2009,
Spotify
Spotify opened public registration for the free
service tier in the United Kingdom.[160] Registrations surged
following the release of the mobile service, leading
Spotify
Spotify to halt
registration for the free service in September, returning the UK to an
invitation-only policy.[161] Premium cards were offered for the 2009
Christmas season that allowed recipients to upgrade an account to
"Premium" status for 1, 3, 6 or 12 months.[162]
For the service's launch in the
United States
United States in July 2011, Spotify
had a six-month free ad-supported trial period, where new users could
listen to an unlimited amount of music. In January 2012, the free
trial started expiring, with users limited to ten hours each month and
five song replays.[163] In March,
Spotify
Spotify removed all limits on the
free service tier indefinitely.[164]
In April 2016, Ek and Lorentzon wrote an open letter to Swedish
politicians demanding action in three areas that they claimed hindered
the company's ability to recruit top talent as
Spotify
Spotify grows,
including access to flexible housing, better education in the
programming and development fields, and stock options. Ek and
Lorentzon wrote that in order to continue competing in a global
economy, politicians needed to respond with new policies, or else
thousands of
Spotify
Spotify jobs would be moved from
Sweden
Sweden to the United
States.[165] Towards the end of the year, the company launched its
"largest [marketing] campaign to date", by placing large-scale
billboards in major cities around the world that humorously mocked
users' listening habits. Billboards featured commentary such as "Dear
person who made a playlist called: ‘One Night Stand With Jeb Bush
Like He’s a Bond Girl in a European Casino.’ We have so many
questions"; "To the 1,235 guys who loved the “Girls Night”
playlist this year, We love you", and "Dear person who played
‘Sorry’ 42 times on Valentine’s Day, What did you do?”
Spotify's Chief Marketing Officer Seth Farbman told Creativity that
"there has been some debate about whether big data is muting
creativity in marketing, but we have turned that on its head ... For
us, data inspires and gives an insight into the emotion that people
are expressing."[166][167]
In February 2017,
Spotify
Spotify announced a major expansion of its US
operations in Lower Manhattan, New York City, at 4 World Trade Center,
into one of its largest operations worldwide, adding approximately
1,000 new
Manhattan
Manhattan jobs and retaining 832 existing positions.[168]
The company's current US headquarters are located in New York City's
Flatiron District.[169]
Other developments[edit]
Streaming records[edit]
Main article: List of most streamed artists on Spotify
In October 2015, "Thinking Out Loud" by
Ed Sheeran
Ed Sheeran became the first
song to pass 500 million streams.[170] A month later, Spotify
announced that "Lean On" by
Major Lazer
.jpg/599px-Major_Lazer_Im_Park_2016_(13_von_15).jpg)
Major Lazer and
DJ Snake
DJ Snake featuring
MØ
.jpg/440px-Mø_(203141).jpg)
MØ was
its most streamed song of all time with over 525 million streams
worldwide.[171] In April 2016,
Rihanna
.jpg/500px-Rihanna_concert_in_Washington_DC_(2).jpg)
Rihanna overtook
Justin Bieber
Justin Bieber to
become the biggest artist on Spotify, with 31.3 million monthly active
listeners.[172] In May 2016,
Rihanna
Rihanna was overtaken by Drake with 3.185
billion total streams.[173] In December 2016, Drake's just-under 26
million monthly listeners were overtaken by the Weeknd's 36.068
million.[174] Later that month, Drake's song "One Dance" became the
first song to hit 1 billion streams on Spotify.[175][176] Upon its
release in August 2017, the single "Look What You Made Me Do" by
Taylor Swift
Taylor Swift earned over eight million streams within 24 hours,
breaking the record for the most first-day streams for a track.[177]
User growth[edit]
In March 2011,
Spotify
Spotify announced a customer base of one million paying
subscribers across Europe,[178] and by September 2011, the number of
paying subscribers had doubled to two million.[179] In August 2012,
Time reported 15 million active users, four million being paying
Spotify
Spotify subscribers.[180] User growth continued, reaching 20 million
total active users, including 5 million paying customers globally and
1 million paying customers in the United States, in December
2012.[181] By March 2013, the service had 24 million active users, 6
million being paying subscribers,[182] which grew to 40 million users
(including 10 million paying) in May 2014,[183] 60 million users
(including 15 million paying) in December 2014,[184] 75 million users
(20 million paying) in June 2015,[185] 30 million paying subscribers
in March 2016,[186] 40 million subscribers in September 2016,[187] and
100 million total users in June 2016.[188]
As of 2018,
Spotify
Spotify has 157 million active users, including over 70
million paying subscribers.[189]
Initial public offering[edit]
According to TechCrunch,
Spotify
Spotify was planning to launch on the stock
market in 2017, but is instead planning on doing the IPO in 2018 in
order to "build up a better balance sheet and work on shifting its
business model to improve its margins".[36] The value of its IPO is
estimated to be in a range of $6.3 billion to $23 billion.[190] The
latter figure would make Spotify's IPO one of the biggest in the tech
sector since 2012.[190] However, unlike in an ordinary public
offering,
Spotify
Spotify will not issue new shares, but the company's
exisiting shareholders will be taking their shares directly to the
market. This approach is not intended to raise fresh capital, but to
let investors get their returns.[191][192][190] Morgan Stanley is the
company's slated advisor on the matter.[192]
As part of its efforts to renegotiate new licensing deals with music
labels,
Financial Times
Financial Times reported in March 2017 that
Spotify
Spotify and major
record labels had agreed that
Spotify
Spotify will restrict some newly
released albums to its Premium tier, with
Spotify
Spotify receiving a
reduction in royalty fees to do so. Select albums would be available
only on the Premium tier for a period of time, before general release.
The deal "may be months away from being finalized, but
Spotify
Spotify is said
to have cleared this particular clause with major record
labels".[193][194][195] New reports in April confirmed that Spotify
and
Universal Music Group
Universal Music Group had reached an agreement to allow artists
part of Universal to limit their new album releases to the Premium
service tier for a maximum of two weeks.
Spotify
Spotify CEO Daniel Ek
commented that "We know that not every album by every artist should be
released the same way, and we’ve worked hard with UMG to develop a
new, flexible release policy. Starting today, Universal artists can
choose to release new albums on premium only for two weeks, offering
subscribers an earlier chance to explore the complete creative work,
while the singles are available across
Spotify
Spotify for all our listeners
to enjoy".[196][197][198] It was announced later in April that this
type of agreement would be extended to indie artists signed to the
Merlin Network agency.[199][200]
After going live on the
New York Stock Exchange
New York Stock Exchange on April 3, 2018, CNBC
reported that
Spotify
Spotify opened at $165.90, more than 25 percent above
its reference price of $132.[201]
Acquisitions[edit]
In March 2014,
Spotify
Spotify announced that it had acquired The Echo Nest, a
music intelligence company that has "in depth musical understanding
and tools for curation to drive music discovery for millions of users
around the globe".[202][203] In June 2015,
Spotify
Spotify acquired Seed
Scientific, a data science consulting firm and analytics company. In a
comment to TechCrunch,
Spotify
Spotify said that Seed Scientific's team would
lead an Advanced Analytics unit within the company focused on
developing data services.[204][205] In April 2016,
Spotify
Spotify acquired
CrowdAlbum, a "startup that collects photos and videos of performances
shared on social networks", and would "enhance the development of
products that help artists understand, activate, and monetize their
audiences".[206][207] In March 2017,
Spotify
Spotify acquired Sonalytic,[208]
an audio detection startup, for an undisclosed amount of money.
Spotify
Spotify stated that Sonalytic will be used to improve the company's
personalised playlists, better match songs with compositions, and
improve the company's publishing data system.[209]
Spotify
Spotify also
acquired MightyTV later in March, an app connected to television
streaming services, including
Netflix
Netflix and HBO Go, that recommends
content to users.
Spotify
Spotify will mainly be using MightyTV to improve its
advertising efforts on the free tier of service.[210] In April 2017,
Spotify
Spotify acquired Mediachain, a blockchain startup with several
technologies that can aid Spotify's effort in connecting artists and
rights-holders with the tracks on its service.[211][212] In May 2017,
Spotify
Spotify acquired artificial intelligence startup Niland, and will use
its technology to improve its personalisation and recommendation
features for users.[213][214] In November 2017,
Spotify
Spotify acquired
SoundTrap, an online music studio startup.[215][216]
Company partnerships[edit]
In January 2015,
Sony
Sony announced PlayStation Music, a new music service
with
Spotify
Spotify as its exclusive partner. PlayStation
Music
Music incorporates
the
Spotify
Spotify service into Sony's
PlayStation 3
PlayStation 3 and
PlayStation 4
PlayStation 4 gaming
consoles, and
Sony
Sony Xperia mobile devices, in 41 markets around the
world. The service enables users to listen to their favourite tracks
while gaming.[217] The new service launched on 30 March 2015.[218]
In March 2017,
Spotify
Spotify announced a partnership with the South by
Southwest (SXSW) conference for 2017, presenting specific content in
special playlists through a SXSW hub in Spotify's Browse tab in the
mobile and desktop apps. The integration also enabled
Spotify
Spotify within
the SXSW GO app to help users discover and explore artists performing
at the conference.[219] Two more partnerships were announced in March;
one with WNYC Studios, and one with Waze. The
WNYC Studios partnership
will bring various podcasts from WNYC to Spotify, including Note To
Self,
On the Media and Here's the Thing.
Spotify
Spotify also announced that
the third season of WNYC Studios'
2 Dope Queens podcast will premiere
with a two-week exclusivity period on the service on 21 March 2017.
The podcasts will be available for all
Spotify
Spotify Free and Premium
users.[220][221] The
Waze
Waze partnership will allow Android app users to
view directions to destinations within the
Spotify
Spotify app, and access
their
Spotify
Spotify playlists through the
Waze
Waze app.[222][223]
In October 2017,
Microsoft
Microsoft announced that it would be ending its
Groove Music
Groove Music streaming service by December, with all music from users
transferring to
Spotify
Spotify as part of a new partnership.[224]
In November 2017, it was announced that Pat McGrath Labs cosmetics
would be sold through
Spotify
Spotify via Merchbar on singer Maggie
Lindemann's artist page.[225]
In December 2017,
Spotify
Spotify and Tencent's music arm,
Tencent
Tencent Music
Entertainment (TME), agreed to swap stakes and make investment in each
other's music businesses, forming an alliance in the music
industry.[226][227]
In February 2018,
Spotify
Spotify and Discord teamed up, allowing Discord
desktop app users, on both PC and Mac, to publicly display on their
profile what music they're listening to, and if the users have
premium, they can listen to each other's music together in
real-time.[228]
Dispute with Apple[edit]
See also: Criticism of
Apple Inc.
Apple Inc. § Spotify
In July 2015,
Spotify
Spotify launched an email campaign to urge its App Store
subscribers to cancel their subscriptions and start new ones through
its website, bypassing the 30% transaction fee for in-app purchases
required for iOS applications by technology company Apple Inc.[229] A
later update to the
Spotify
Spotify app on iOS was rejected by Apple,
prompting Spotify's general counsel Horacio Gutierrez to write a
letter to Apple's then-general counsel Bruce Sewell, stating: "This
latest episode raises serious concerns under both U.S. and EU
competition law. It continues a troubling pattern of behavior by Apple
to exclude and diminish the competitiveness of
Spotify
Spotify on iOS and as a
rival to Apple Music, particularly when seen against the backdrop of
Apple's previous anticompetitive conduct aimed at
Spotify
Spotify … we
cannot stand by as Apple uses the App Store approval process as a
weapon to harm competitors."[230]
Sewell responded to the letter: "We find it troubling that you are
asking for exemptions to the rules we apply to all developers and are
publicly resorting to rumors and half-truths about our service." He
also elaborated that "Our guidelines apply equally to all app
developers, whether they are game developers, e-book sellers,
video-streaming services or digital music distributors; and regardless
of whether or not they compete against Apple. We did not alter our
behavior or our rules when we introduced our own music streaming
service or when
Spotify
Spotify became a competitor". Furthermore, he stated
that "There is nothing in Apple’s conduct that ‘amounts to a
violation of applicable antitrust laws.’ Far from it. ... I would be
happy to facilitate an expeditious review and approval of your app as
soon as you provide us with something that is compliant with the App
Store’s rules".[231][232]
The following months,
Spotify
Spotify began efforts to "punish" artists who
gave
Apple Music
Apple Music exclusives by displaying their content less
prominently on
Spotify
Spotify and offering fewer promotional
opportunities,[233] and joined several other companies in filing a
letter with the European Union's anti-trust body vaguely accusing
Apple and
Google
Google of "abusing their 'privileged position' at the top of
the market", by referring to "some" companies as having "transformed
into 'gatekeepers' rather than 'gateways'".[234][235] The complaint
lead to the
European Union
European Union announcing that it will prepare an
initiative by the end of 2017 for a possible law addressing unfair
competition practices.[236][237]
Accolades[edit]
In September 2010, the
World Economic Forum
World Economic Forum (WEF) announced the
company as a Technology Pioneer for 2011.[238][239]
In August 2017,
Spotify
Spotify was the most downloaded music app on the iOS
platform in the United States.[240]
Criticism[edit]
Main article: Criticism of Spotify
Spotify
Spotify has attracted significant criticism since its 2008
launch.[159] The primary point of criticism centres around what
artists, music creators and the media have described as
"unsustainable" compensation.[241] Unlike physical sales or legal
downloads, which pay artists a fixed price per song or album sold,
Spotify
Spotify pays royalties based on their "market share"—the number of
streams for their songs as a proportion of total songs streamed on the
service.
Spotify
Spotify distributes approximately 70% of its total revenue to
rights-holders, who will then pay artists based on their individual
agreements.[7] Multiple artists and bands have given harsh critique to
Spotify
Spotify over its payment policy, with the most notable examples being
Thom Yorke
.jpg/440px-Thom_Yorke_Austin_Texas_2016_(cropped).jpg)
Thom Yorke and Taylor Swift, two hugely successful artists who
withdrew their entire music collections from the service.[242][243]
Their content has since been restored.[244][245] While the streaming
music industry in general faces the same critique about inadequate
payments,[246] Spotify, being the leading service,[247] faces
particular scrutiny due to its free service tier, allowing users to
listen to music for free, though with advertisements between
tracks.[248] The free service tier has led to a variety of major album
releases being delayed or withdrawn from the service.[249][250][251]
In response to the allegations about unfair compensation, Spotify
claims that it is benefitting the industry by migrating users away
from piracy and less monetised platforms to its free service tier, and
then encouraging them to upgrade to paid accounts.[7] A study has
shown that record labels keep a high amount of the money earned from
Spotify,[252][253] and the CEO of Merlin Network, a representative
body for over 10,000 independent labels, has also observed significant
yearly growth rates in earnings from Spotify, while clarifying that
Spotify
Spotify pays labels, not artists.[254]
Additionally, the company has attracted media attention for several
forms of security breaches,[255][256] as well as for controversial
company behaviours, including a significant change to its privacy
policy,[257] "pay for play" practices based on receiving money from
labels for putting specific songs on popular playlists,[258] and
allegedly creating "fake artists" for prominent playlist
placement,[259] the last of which
Spotify
Spotify has vehemently denied.[260]
See also[edit]
List of streaming media systems
Tech companies in the New York metropolitan area
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