How Did Spotify Come About?

Spotify didn’t invent audio streaming, but it has reached such a high level of relevance that it’s synonymous with digital music today. The proof of this is that the company continues to work and can be proud of respectable numbers: 380 million active users, about 70 million songs in the collection and more than 18 billion euros paid in royalties.

It may come as a surprise that Spotify has been around for many years, after all, the service only gained worldwide recognition about five years ago. But the truth is that the history of the company starts much earlier, in 2006, when the idea of ​​music streaming seemed like a utopia due to the small number of fast internet connections.

Music piracy was very strong during this period and legal alternatives were difficult or very limited. For example, to buy music, you had to turn to services such as iTunes. Streaming platforms already existed, but they had a small collection or were limited to certain countries such as the US.

How Did Spotify Come About

This scenario began to change thanks to a young man named Daniel Ek. Following the example of his grandparents, who were musicians, he learned to play the guitar and sing as a child, not knowing, however, that one day his love for music would change the course of the market. By the age of 14, he was already an experienced programmer and began developing websites. Daniel soon made enough money to have several businesses.

One day, Daniel Ek received a notice from the Swedish government that he owed a lot of money in taxes. It was unintentional. He just lacked business vision. In order not to go broke, the young entrepreneur had to sell four of his companies.

Daniel Ek approached Martin Lorenzon, a Swedish businessman who had bought one of his businesses, digital marketing firm Advertigo. Being much older and more experienced, Lorenzon acted as a kind of mentor to Daniel, although he was discouraged by life.

In one of the conversations, the idea of ​​​​creating Spotify came up. The name doesn’t really matter. Apparently, Lorenzo used this word or a similar term when they were both debating which name to use. Spotify eventually prevailed due to the combination of the words “reveal” and “identify”.

It was 2006. At this point, it is worth remembering the problem of piracy. They knew about it and saw it as an opportunity: on the one hand, there were users pirating because they didn’t have a better way to get the music; on the other hand, the industry has begun to accept the idea of ​​the impossibility of avoiding the digital revolution, no matter how trite this expression may sound.

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The idea was to create something more attractive than piracy, that is, to convince the user that paying for a music service would bring more benefits than just downloading content via BitTorrent and the like.

At that point, the challenge was serious because the buying model prevailed: you pay for an album, whether it’s physical or digital, and it’s yours. Spotify, on the other hand, was conceived under a paywall model rather than ownership.

As a result, Spotify only started operating as a streaming platform in 2008 despite the fact that the company was founded in 2006. When Universal, EMI Music and other major labels agreed to participate in the project as an experiment, the service finally started working. But Spotify only became truly famous after 2011, when it arrived in the United States. Today, this streaming platform is the most popular in the world.

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