Spotify is a music streaming service that was the brainchild of Martin Lorentzon and Daniel El in Sweden about a decade ago. The idea emerged first in 2006 as an attempt to address the problem of #Music Piracy and became a reality two years later. Music piracy had become a major problem for the music industry and caused billions of dollars in loss of revenue. This small start-up has grown into a billion-dollar empire since it was introduced and it is reported that Spotify may soon be publicly trading on the New York Stock Exchange. The service offers free streaming with advertisements to music fans and a subscription upgrade option.

Growth and expansion

The start-up streaming service offered public registration for its free service in the United Kingdom in February 2009 but was forced to stop due to a surge in applicants with the introduction of its mobile service and reverted to an invitation-only service.

The service launched in the US in 2011 and by 2012, it removed time limits on its service indefinitely. Spotify is now available in Australia, New Zealand, most of Europe and North America and some Asian countries and can be accessed from most computer and smartphone devices and platforms.

Making money

Shortly after it got into the streaming business, Spotify suffered a loss of over 31 Million Swedish Kronor but by 2010 it was reported that the streaming company was beating out other Swedish music retailers, both online and offline, in earnings. Based on recent information (2017-2018 ) Spotify had over 140 million active users, 70 million paying users with music fans having access to over 30 million songs.

Royalties are paid to the artists based on how their music is streamed and about 70% of total revenue is returned to the rights holders who in turn compensate artists in keeping with their individual contracts.

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Other sources of revenue are from the now discontinued in-app music purchases and sponsored playlists.

The competition comes knocking

Spotify may be the largest music streaming company in the world but others have been working hard to get a piece of the action. Its main competition came from Apple Music in 2015. With its introduction of a monthly fee for unlimited access to its music library and the securing of exclusive deals with superstars like #Taylor Swift and Drake, the competition was heating up.

Artists cry foul

Not everyone was happy with their Spotify experience and it would feel the sting of criticism from some major artists. The feud between Taylor Swift and Spotify made headlines when she claimed that the streaming service was merely an experiment and did not compensate artists fairly. The feud lasted three years but to the delight of Spotify, Taylor Swift is back.