The History of Spotify

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After the era of cassette tapes, CDs, MP3s, and iTunes, music streaming services like Spotify is the present and the future. Even if you don’t use it yourself (but who doesn’t?), chances are you have heard of it. Spotify has shaken up the music industry by offering the tracks you like you can listen to anytime and anywhere – unlimited in its freemium service. With Spotify, you can listen to your favorite tracks without paying a dime, but if you like offline and commercial-free listening, you can opt for the paid subscription.  You can also get Spotify Streams kaufen if you have song uploaded there.

Spotify offers access to more than 60 million songs, and users can sign up and subscribe very easily. Users can browse music by parameters such as genre, artist, album, and can even create, edit, and share their own playlists. It can be used in most modern devices, including Windows, macOS, and Linux computers, and on smartphones and tablets run by Android or iOS.

As of July 2020, Spotify has around 300 million monthly active users, including 138 million paying subscribers. So how did it came to be the streaming giant it is today? Here’s the history of Spotify:

The Spotify CEO and co-founder Daniel Ek first thought of the idea for Spotify in 2002, when Napster, the controversial file-sharing network, stoped working and a subsequent music-downloading service Kazaa became ascendant. In 2006, Ek became a millionaire at age 23 after selling his adtech startup Advertigo to Martin Lorentzon.

Ek and Lorentzon decided to co-find Spotify together in 2006 in Stockholm, Sweden. The name of the company is the etymology of a combination of “spot” and “identify.” It took them two years to make licensing deals with record companies, and in 2008, Spotify was launched, opening paid subscriptions to everyone. Free accounts were only available by invitation.

Spotify wasn’t available in the United States yet in 2009, though there are ways to download it from Europe. Facebook CEO was one of those who tried it and posted it on his Facebook wall, “Spotify is so good.” So when Spotify launched its service in the United States, it allied with Facebook. In its first year in the US, Spotify quickly won one million paying users.

The company received a $100 million investment to make its launch to the United States possible. Sean Parker, the co-founder of Napster, was brought on board to secure relationships with major record labels.

In 2010, Spotify released a desktop music manager, amplifying the rumors that Spotify is competing with Apple and iTunes. In 2011, the company introduced the Spotify Apps service, making it possible for third-party developers to design apps that can be hosted within the Spotify computer software. That same year, Facebook announces a new Open Graph, allowing more user activity to be shared on Facebook Timeline. As users listened to Spotify, it publishes their listens on their timelines so that people could listen to that music within Facebook. It created a huge backlash amongst its users, which Facebook is used to, but it was the first instance of Spotify annoying its users. Ek rolled out a private listening mode a week later so that every song they listen to wouldn’t be shared with Facebook. However, two months after Facebook integration, Spotify gained seven million more users.

Spotify creators did not see the fast rise of smartphones coming. The original software was created for PCs, and the company was slow to build an app. Thankfully, they launched their service on Android smartphones in 2012, because if they did it later than that, it would have killed the company.

In 2012, Spotify also introduced a Spotify Play Button, an embeddable music player that can be added to websites, blogs, or social media profiles that allow visitors to listen to a specific playlist, album, or song without leaving the page. Spotify also rolled out a web player that doesn’t need any installation that same year.

Spotify made its first acquisition in 2013 when it bought Tunigo, which helped users create, find, and share new music and playlists on Spotify.

As Spotify continues its service, a problem emerged. Top artists began complaining that the streaming service was paying them too little and stripping down the value of their albums. In 2009, news circulated that Lady Gaga’s song “Poker Face” has been streamed for a million times on the platform, but Spotify only gave her a royalty check for $167. It started questions about Spotify’s value to artists. In 2014, Taylor Swift famously pulled out her music with Spotify over concerns about fees. At that time, Ek stated that Spotify has paid more than $2 billion to music rights holders since its launch in 2008, and argued that streaming is better than the piracy as piracy doesn’t pay artists a penny.

In 2015, Spotify updated and rebranded itself. It introduced a new “Home” page that would show recommended music, with recommendations improving over time. That same year, they also launched Discover Weekly, a weekly-generated playlist that gives users two hours of custom-made music recommendations by considering the user’s personal taste with their previous songs enjoyed. The company also expanded into podcasts, news radio, and video streaming, making deals with ESPN, Comedy Central, Vice, and BBC.

In June 2015, Spotify announced that the company raised an additional half a billion dollars and had 20 million subscribers out of 75 million listeners.

Spotify formed a partnership with music annotation service Genius in 2016, bringing the annotation information from Genius to info cards presented while playing songs on Spotify. This feature is limited to selected playlists and only on Spotify’s iOS app when it was launched, but it expanded to the Android app in 2017. They also introduced Release Radar, a personalized playlist that helps users stay up to date on new music releases from artists usually listen to. By September, Spotify launched Daily Mix, which is a series of up to six playlists with near-endless playback, mixing the user’s favorite tracks with new and recommended songs.

In 2017, Spotify made a new deal with Universal Music Group to license its music. Under the deal, some new music will only be available to subscribers for a brief period of time. It’s seen as an essential step in Spotify, getting all its record deals ready for its rumored IPO. That year, Taylor Swift comes around and returns to Spotify after her breakup with the streaming service in 2014.

The company introduced Spotify Codes for mobile apps in 2017, a way for users to share specific tracks, playlists, artists, or albums with other people. Before the year ended, Spotify and Tencent invested in each other, and the deal helped Spotify establish a strategic partnership with the largest digital service in China.

Spotify was planning to become public on the stock market in 2017 but decided to use an IPO in 2018. The value of its IPO ranges from $6.3 billion to $23 billion. However, Spotify did not issue new shares, but its existing shareholders would take their shares directly to the market. They did not intend to raise capital but to let investors get their returns.

In 2018, Spotify began to allow free users to listen on-demand to whatever songs they want to listen to, as long as the song is included in the users’ discovery playlists. They also introduced a new beta feature that gave labels, artists, and teams an easier way to submit unreleased music directly to Spotify for playlist consideration.

Spotify worked on improving what Spotify for your road trip in 2019. Car View for Android was introduced in Spotify, allowing Android devices to have a Now Playing screen when their device is connected to a car’s Bluetooth. Also, Spotify launched the Your Daily Drive custom playlist that replicates the drive time format of most traditional radio stations. This mixes short podcast news updates from NPR, The Wall Street Journal, and PRI to a mix of user’s favorite songs and artists interspersed with songs the listener has yet to discover.

In 2020, Spotify introduced the Group Session feature, allowing two or more Premium subscribers in the same location to share control over the music that’s being played. Spotify also removed the 10,000-song limit to the library.

Interesting Facts About Spotify

An iPhone 11 screen showing Spotify icon

Spotify is the largest media streaming service in the world, and it won’t be a surprise if you are already using Spotify. For listening to the music of different genres and artists, and even podcasts – it’s one of the best mediums right now. If you want to know more about Spotify, here are some interesting facts:

1. The name “Spotify” is a combo of two words that spell out their purpose

Founder Daniel Ek revealed that Spotify got its name as a combination of two words: “spot” and “identify.” This is rather simple and is not the most creative name, but there’s no doubt that it’s very memorable. The word “spot” came from “spotlight,” and the word “identify” means to discover. And that’s what Spotify offers its users – to identify the music they want to put in the spotlight in their listening habits.

2. Spotify makes money in two ways

First, Spotify earns through its paying premium members. In the third quarter of 2022, it was reported that Spotify had 195 million premium subscribers worldwide [1]. The company generated more than 9.67 billion euros in revenue in 2021, which was up from 7.88 billion in 2020 [2].

Then, there’s free membership. This segment makes money for Spotify through ads. Free users will hear and see ads so often and are not allowed to skip them nor access the full range of features the streaming service offers. As of the first quarter of 2022, Spotify had 236 million active monthly users who were on a free account [3].

3. The average artist earns little from Spotify

Spotify does have to pay royalties to the artists who allow their music to be streamed over the platform. Spotify paid more than $7 billion to its artists.

However, the money that artists make on Spotify is minuscule compared to what they are worth. This is why it’s better to support artists by buying their albums or attending concerts.

An artist receives roughly $0.006 to $0.0084 per stream. For a million streams, the artist would get around $6,000 to $8,400. A track must be played for a minimum of 30 seconds for a track to count as one stream.

4. Spotify knows what you like

Because you listen to your favorite music on Spotify, they curate different playlists for you. The AI takes note of the songs you like to listen to; from there, they understand the kinds and genres of music you want to listen to. It also keeps track of the songs you listen to repeatedly. It can even record the amount of time you spend on Spotify each year. This enables Spotify to make all the playlists that it does.

5. Artists don’t have to be famous to be on Spotify

While it’s safe to say that famous musicians and hitmakers are the ones most listened to on Spotify – an artist doesn’t need to be famous to upload a song to their library. If an artist wants to have a song on Spotify, they need to send the song to Ditto, an online music distribution company that verifies tracks from artists. Once the song has been verified and uploaded, the website handles the distribution process for Spotify to approve or deny.

6. Around 25% of songs on Spotify haven’t been played

You might think that everything on Spotify has been played at least once, but that’s not the case. Around 25% of the tracks on Spotify have never been played – these are primarily original songs from unknown artists and band covers [4]. This means that there’s a whole lot of music on Spotify yet to be discovered!

7. Spotify is accessible to 183 countries around the world

As of writing, the Spotify platform is accessible in 183 countries. By 2020, the streaming service expanded its reach to 80+ additional countries, showing that it continues to expand [5].

8. Spotify’s target audience is millennials

An image of a a millennial woman listening to Spotify on headphones

The majority of users on Spotify are millennials, as most of them have been on the app since the late 2010s. As of 2023, the largest age group on Spotify is users between the ages of 25 to 34, making up 29% of its users. The next largest age group is users 18-24 years of age, who make up 26% of the users of the platform [6].

9. Spotify Wrapped launched in 2017

Spotify Wrapped initially started in 2015, but it was called “Year in Music” at the time. This showcased the biggest songs of the year and the user’s top 100 songs. In 2016, it was renamed Wrapped, but it wasn’t until 2017 that its functionality changed. Now, it features a lot of personalized listening data for users to see the music they loved over the course of the year.

10. Spotify Wrapped increased app downloads

During the first week of December 2020, Spotify saw a 21% increase in mobile app downloads after they released the year’s Spotify Wrapped [7]. As users shared their Spotify Wrapped data on different social media platforms, everyone seemed to join in!

11. Bad Bunny was the most streamed artist in 2022

Bad Bunny amassed more streams than any other artist that year. In 2021, here’s a look at the top five artists to show who the world was listening to:

  • Bad Bunny
  • Taylor Swift
  • Drake
  • The Weeknd
  • BTS

12. Coronavirus made people use Spotify more than before

Spotify has had more streams than before 2020. This is because people spent more time at home during the lockdowns and had Spotify on in the background. Therefore, more devices are playing Spotify than before. Before the virus, people would only listen to one unit in the office, but during the lockdown, people worked from home, so they played on their devices.

13. Lyrics for many songs are available on Spotify’s mobile player

Gone are the days when you needed to search for the lyrics as you listened to music. The lyrics feature for many songs is available on Spotify’s mobile and web player. It’s also available on Spotify TV and Chromecast.

14. It has changed the music industry

Spotify made streaming popular, as it made a new era of simply playing music online instead of downloading it and storing it on your device. It has also put unheard-of artists on the same playing field as international superstars. Today, anyone can make music and upload it to Spotify.

 

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