How Spotify Came To America

The world’s most popular music streaming service, Spotify, has come to America and taken it by storm. It didn’t happen yesterday, but still Spotify’s leading position in the world’s largest music market, the United States of America, needs constant reaffirmation.

Businessmen paid dearly for the opportunity to enter the largest market in the world in the United States. People in North America are disciplined: pirated tracks are not very fond of, they have money – and they are ready to spend it for the opportunity to listen to high-quality music without annoying advertising and other restrictions. The field of activity is bottomless – in order to gain a foothold on it, Ek and Laurenston spent:

  • 20% of the company’s shares in favor of such labels as Universal, Sony and Warner (cooperated with them before, but not on such draconian terms);
  • about half a billion dollars a year for track licenses – moreover, this money is paid regardless of whether users listen to them or not;
  • some amount of time and money to add a “buy song” feature similar to iTunes.

One of the steps, on the one hand, dubious, on the other hand very effective, is the temporary cancellation of free user licenses. Now, in order to use any features of Spotify, people have to purchase a paid subscription. With a relatively low cost of services ($ 5 per month on average around the world), people got what they could not see even for much more money:

  • formation of own playlists;
  • selections from the service, published daily according to the interests of each specific user;
  • podcasts (not new, but nonetheless useful and interesting);
  • in addition, already in the early 2010s, Spotify pleased the consumer with the highest sound quality – up to 320 kb / s.

Until 2011, the service was considered unprofitable (more than $50 million), but in 2013 there was the first surge in attendance – the launch of a free mobile application pushed some users away from iTunes and some smaller competitors, as a result of which music performers who place tracks on streaming staged a real action protest. If earlier they did not think about the level of their income (attendance at Spotify was not very large), now that listening to songs has risen by several million times a week, the musicians have realized that they receive crumbs from the profits.

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A wave of deleting compositions from the service began, as a result of which a decline in user attendance began. Daniel and Martin tensed up, but found a way out quickly:

  • revised the terms of cooperation with sound recording companies;
  • began to enter into agreements directly with contractors;
  • added the function of self-loading tracks by authors.

In addition, the company began to develop versions for a variety of devices. For example, in 2015, an application for the Sony PlayStation game console saw the light of day – users were delighted, and musicians’ incomes increased several times. By 2017, previously departed performers began to return to the service – including the main brawler Taylor Swift, who expressed dissatisfaction not only with meager deductions in her favor, but also with the “attachment” to the service of free users (by that time they had reappeared).

Now the company has overcome almost all contradictions with both artists and labels – it has spread to almost 200 countries of the world, and its assets are estimated at $ 34 billion. Despite the fact that in 2016 Laurentson ceded the official post of CEO to Ek, the development strategy has not changed – the streaming service continues to introduce new features, and the number of users is only growing.

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