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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
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
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
Major Lazer
and DJ Snake
DJ Snake
featuring
was its most streamed song of all time with over 525 million streams worldwide.[171] In April 2016, Rihanna
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
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

References[edit]

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