Who is Daniel Ek, the father of Spotify, and how the legal streaming app was born
He was building websites at the age of 14 involving his classmates. Years later, she will revolutionize the music world.
Spotify is a music streaming service born from an idea of Martin Lorentzon and Daniel Ek in Sweden about a decade ago: the internet was bringing about big changes in all sectors, and the attempt to tackle the problem of music piracy was a success.
The major record industry suffered billions of dollars in losses due to newborn peer-to-peer sharing systems and duplication on digital media. For all of us who grew up with Walkmans and CD players, this is recent history: a DVD burner was within everyone’s reach.
Who is Daniel Ek, CEO of Spotify
Daniel Ek received his first computer as a gift at age 5. Born in Sweden in 1983, Daniel entered the world of digital services work at 14, building websites with his classmates with some success in a booming market.
His path could be more linear: he enrolls in university but does not complete his studies, and although not a graduate, he applies for a position at Google, but he is rejected.
Founds and sells Advertigo, then depression.
After high school, Daniel founded Advertigo and became a millionaire. But he too is sad: he is only 23 years old, is surrounded by luxury and pleasant company, and slowly slips into depression.
Reconsider his life and his path: do the people around him only do it for the success and money he has? He sells his newly purchased Ferrari (yes, a Ferrari) and moves back to Ragsved, the Stockholm suburb where he grew up.
The meeting with Lorentzon and μTorrent
He meets Martin Lorentzon again, the entrepreneur to whom he had sold Advertigo. The Spotify adventure begins with him: they are both in love with Napster, with the revolution that has meant file sharing between users.
Their goal, however, is to formalize a perfectly legal system for streaming music; precisely for this reason, the first approaches with μTorrent, of which Ek becomes CTO, are not particularly fruitful: Daniel wants to operate in a system that is not on the verge of illegality, he wants a real antidote to music piracy able to put everyone agree.
How Spotify was born
This small startup fits perfectly into that context, building a real empire up to listing on the stock exchange. The basic service is free, but the platform offers the possibility of subscribing to a paid premium plan with numerous additional options.
Spotify growth and expansion
In October 2008, Spotify was finally ready to go live online after Ek managed to strike deals with record labels for content distribution.
The music industry had survived the transition from vinyl to cassette tapes and then CDs, but the ease with which songs could be copied and shared on the internet was absorbing sales and profits.
The record industry has chosen the only way to survive: collaborating with Spotify but entering the company’s capital; in 2009, he controlled 20%. Martin Lorentzon and Daniel El have been able to give up part of the profit to facilitate the closing of an agreement that has had historical significance on the use of music online.
In February 2009, Spotify was already offering its free service in the UK but was forced to a halt due to a sudden surge in users registering for the service, returning to an invitation-only mode. The service got off to a serious start when it landed in the United States and is now present in large parts of Europe, Australia, and New Zealand. In some Asian countries, it is available on most smartphones.
How Spotify pays musicians
Spotify’s departure was not with a bang: taking its first steps into the world of music streaming, the app was even at a loss. But since 2010, Spotify began to massacre competitors, engulfing or leading to the closure of other music services. Based on the numbers provided by Spotify updated as of December 2017, the popular music app currently boasts
- 71 million subscribers
- 157 million active users
- Over 35 million songs
- Over 2 billion playlists
Royalties are paid to artists based on how much their songs are listened to. Around 70% of the revenue goes to rights managers who pay artists based on internal agreements. Other sources of revenue come from in-app music purchases.
Spotify’s Apple competitor
The market is delicious, and Spotify’s competitors are certainly not standing idly by: Apple Music, introduced in 2015, allowed unlimited access to its music library upon payment of a monthly fee and was awarded important deals with stars of the likes of Taylor Swift and Drake.
Not everyone is happy with their Spotify experience: Taylor Swift’s feud with Spotify caused a stir when the artist claimed the platform doesn’t compensate artists fairly. The clash lasted three years but to the delight of Spotify, Taylor Swift is back.