$2 Billion and Counting

- A blog post written by Daniel Ek (@eldsjal)

Taylor Swift is absolutely right: music is art, art has real value, and artists deserve to be paid for it. We started Spotify because we love music and piracy was killing it. So all the talk swirling around lately about how Spotify is making money on the backs of artists upsets me big time. Our whole reason for existence is to help fans find music and help artists connect with fans through a platform that protects them from piracy and pays them for their amazing work. Quincy Jones posted on Facebook that “Spotify is not the enemy; piracy is the enemy”. You know why? Two numbers: Zero and Two Billion. Piracy doesn’t pay artists a penny – nothing, zilch, zero. Spotify has paid more than two billion dollars to labels, publishers and collecting societies for distribution to songwriters and recording artists. A billion dollars from the time we started Spotify in 2008 to last year and another billion dollars since then. And that’s two billion dollars’ worth of listening that would have happened with zero or little compensation to artists and songwriters through piracy or practically equivalent services if there was no Spotify – we’re working day and night to recover money for artists and the music business that piracy was stealing away.

When I hear stories about artists and songwriters who say they’ve seen little or no money from streaming and are naturally angry and frustrated, I’m really frustrated too. The music industry is changing – and we’re proud of our part in that change – but lots of problems that have plagued the industry since its inception continue to exist. As I said, we’ve already paid more than $2 billion in royalties to the music industry and if that money is not flowing to the creative community in a timely and transparent way, that’s a big problem. We will do anything we can to work with the industry to increase transparency, improve speed of payments, and give artists the opportunity to promote themselves and connect with fans – that’s our responsibility as a leader in this industry; and it’s the right thing to do.

We’re trying to build a new music economy that works for artists in a way the music industry never has before. And it is working – Spotify is the single biggest driver of growth in the music industry, the number one source of increasing revenue, and the first or second biggest source of overall music revenue in many places. Those are facts. But there are at least three big misconceptions out there about how we work, how much we pay, and what we mean for the future of music and the artists who create it. Let’s take a look at them.

Myth number one: free music for fans means artists don’t get paid. On Spotify, nothing could be further from the truth. Not all free music is created equal – on Spotify, free music is supported by ads, and we pay for every play. Until we launched Spotify, there were two economic models for streaming services: all free or all paid, never together, and both models had a fatal flaw. The paid-only services never took off (despite spending hundreds of millions of dollars on marketing), because users were being asked to pay for something that they were already getting for free on piracy sites. The free services, which scaled massively, paid next to nothing back to artists and labels, and were often just a step away from piracy, implemented without regard to licensing, and they offered no path to convert all their free users into paying customers. Paid provided monetization without scale, free reached scale without monetization, and neither produced anywhere near enough money to replace the ongoing decline in music industry revenue.

We had a different idea. We believed that a blended option – or ‘freemium’ model – would build scale and monetization together, ultimately creating a new music economy that gives fans access to the music they love and pays artists fairly for their amazing work. Why link free and paid? Because the hardest thing about selling a music subscription is that most of our competition comes from the tons of free music available just about everywhere. Today, people listen to music in a wide variety of ways, but by far the three most popular ways are radio, YouTube, and piracy – all free. Here’s the overwhelming, undeniable, inescapable bottom line: the vast majority of music listening is unpaid. If we want to drive people to pay for music, we have to compete with free to get their attention in the first place.

So our theory was simple – offer a terrific free tier, supported by advertising, as a starting point to attract fans and get them in the door. And unlike other free music options – from piracy to YouTube to SoundCloud – we pay artists and rights holders every time a song is played on our free service. But it’s not as flexible or uninterrupted as Premium. If you’ve ever used Spotify’s free service on mobile, you know what I mean – just like radio, you can pick the kind of music you want to hear but can’t control the specific song that’s being played, or what gets played next, and you have to listen to ads. We believed that as fans invested in Spotify with time, listening to their favorite music, discovering new music and sharing it with their friends, they would eventually want the full freedom offered by our premium tier, and they’d be willing to pay for it.

We were right. Our free service drives our paid service. Today we have more than 50 million active users of whom 12.5 million are subscribers each paying $120 per year. That’s three times more than the average paying music consumer spent in the past. What’s more, the majority of these paying users are under the age of 27, fans who grew up with piracy and never expected to pay for music. But here’s the key fact: more than 80% of our subscribers started as free users. If you take away only one thing, it should be this: No free, no paid, no two billion dollars.

Myth number two: Spotify pays, but it pays so little per play nobody could ever earn a living from it. First of all, let’s be clear about what a single stream – or listen – is: it’s one person playing one song one time. So people throw around a lot of stream counts that seem big and then tell you they’re associated with payouts that sound small. But let’s look at what those counts really represent. If a song has been listened to 500 thousand times on Spotify, that’s the same as it having been played one time on a U.S. radio station with a moderate sized audience of 500 thousand people. Which would pay the recording artist precisely … nothing at all. But the equivalent of that one play and its 500 thousand listens on Spotify would pay out between three and four thousand dollars. The Spotify equivalent of ten plays on that radio station – once a day for a week and a half – would be worth thirty to forty thousand dollars.

Now, let’s look at a hit single, say Hozier’s ‘Take Me To Church’. In the months since that song was released, it’s been listened to enough times to generate hundreds of thousands of dollars for his label and publisher. At our current size, payouts for a top artist like Taylor Swift (before she pulled her catalog) are on track to exceed $6 million a year, and that’s only growing – we expect that number to double again in a year. Any way you cut it, one thing is clear – we’re paying an enormous amount of money to labels and publishers for distribution to artists and songwriters, and significantly more than any other streaming service.

Myth number three: Spotify hurts sales, both download and physical. This is classic correlation without causation – people see that downloads are down and streaming is up, so they assume the latter is causing the former. Except the whole correlation falls apart when you realize a simple fact: downloads are dropping just as quickly in markets where Spotify doesn’t exist. Canada is a great example, because it has a mature music market very similar to the US. Spotify launched in Canada a few weeks ago. In the first half of 2014, downloads declined just as dramatically in Canada – without Spotify – as they did everywhere else. If Spotify is cannibalising downloads, who’s cannibalising Canada?

By the same token, we’ve got a great list of artists who promoted their new releases on Spotify and had terrific sales and lots of streaming too – like Ed Sheeran, Ariana Grande, Lana Del Rey and alt-J. Artists from Daft Punk to Calvin Harris to Eminem had number ones and were on Spotify at the same time too.

Which brings us back to Taylor Swift. She sold more than 1.2 million copies of 1989 in the US in its first week, and that’s awesome. We hope she sells a lot more because she’s an exceptional artist producing great music. In the old days, multiple artists sold multiple millions every year. That just doesn’t happen any more; people’s listening habits have changed – and they’re not going to change back. You can’t look at Spotify in isolation – even though Taylor can pull her music off Spotify (where we license and pay for every song we’ve ever played), her songs are all over services and sites like YouTube and Soundcloud, where people can listen all they want for free. To say nothing of the fans who will just turn back to pirate services like Grooveshark. And sure enough, if you looked at the top spot on The Pirate Bay last week, there was 1989

Here’s the thing I really want artists to understand: Our interests are totally aligned with yours. Even if you don’t believe that’s our goal, look at our business. Our whole business is to maximize the value of your music. We don’t use music to drive sales of hardware or software. We use music to get people to pay for music. The more we grow, the more we’ll pay you. We’re going to be transparent about it all the way through. And we have a big team of your fellow artists here because if you think we haven’t done well enough, we want to know, and we want to do better. None of that is ever going to change.

We’re getting fans to pay for music again. We’re connecting artists to fans they would never have otherwise found, and we’re paying them for every single listen. We’re not just streaming, we’re mainstreaming now, and that’s good for music makers and music lovers around the world.  

Introducing the new look Spotify for iPad

This slideshow requires JavaScript.

Today we’re bringing the best looking version of Spotify to iPad. The same dark theme, refreshed typography and rounded iconography that you love on iPhone and computer is now available on iPad. Playing your favourite music never looked so good.

We’re not only improving our looks though. From your feedback we know that tablets are one of the most popular platforms when it comes to discovering, curating and saving music. And we know that you’ve been looking for more ways of managing your music. So today we’re bringing Your Music to iPad: helping you save, organise and browse your favourite music the way you want to.

So now, you can easily build your collection while lying on the couch with your iPad, take it on the go on your phone, and access it on your computer when you get to work. 

And it all looks amazing. 

The new Spotify for iPad starts rolling out today and can be downloaded through the App Store.

Welcome to the dark side. 

Spotify Landmark: Led Zeppelin’s IV

1971-08-x---LA---promo_BR_MaxK-copy
To round out the month of Rocktober, Spotify Landmark – our series documenting music’s greatest moments in the words of those who made them – sets its sights on one of rock’s defining albums, Led Zeppelin’s “IV.” We bring you the “aural history” of the album in newly recorded interviews with the legendary band’s surviving members: guitarist and producer Jimmy Page; bassist, keyboardist and multi-instrumentalist John Paul Jones; and singer/lyricist Robert Plant.

Led Zeppelin recounts the story behind “IV,” and sheds light on their on-going re-issue campaign, which features each of their original studio releases re-mastered and packed full with never-before-heard companion audio.

It’s all here, only on Spotify Landmark.

 

 

Introducing Spotify Family – one account for the whole band.

Spotify Family

Are you currently sharing your Spotify account with the entire family? Want to keep your 60s soul classics playlist separate from your kids’ Frozen soundtrack and save money in the process?

Well, great news! With Spotify Family you can now invite up to four family members and share one billing account whilst keeping your listening history, recommendations and playlists completely separate.

The more the merrier.

Having a family can be expensive. But music doesn’t have to be. With Spotify Family, you can add up to four family members to your account, and each additional user gets up to 50% off Spotify Premium.

You each get your own account.

Your own music. Your own playlists and recommendations. But just one simple family bill. It’s great for big families with lots of different devices, as everyone can play at once. No more interruptions when mum logs in. No more fighting over Calvin vs Lionel.

Spotify Family will roll out globally over the upcoming weeks. To learn more about this great new deal, click here 

Hello Canada. Spotify here!


We’re excited to say hello to our new friends in Canada! Starting today, from Vancouver to Montreal to St. John’s and everywhere in between, fans have immediate access to:

  • An unbeatable music experience: listen to whatever music you want, whenever you want, on any device for free. Discover, organize and share. Offering amazing audio quality of up to 320kbps and with a sleek design, playing your favorite music never looked and felt this good.
  • Unrivalled music access: over 20 million songs at your fingertips and updated daily, mixing global hits with one of the most extensive Canadian music catalogues available including a comprehensive Quebecois library. Check out music from your friends and favorite celebrities. Add in our unbeatable music discovery and organization tools and Spotify has all your music needs covered.
  • Play your way: Download the Spotify app and listen to any song, album or artist, on any device on our fully licensed free tier. Shuffle play on mobile or play any song on tablet or desktop. Alternatively, upgrade to Spotify Premium for $10 CAD per month and enjoy the ultimate music experience: download and listen to you music offline, fully on-demand, without ads, in highest quality audio.

Today sees Canada become the fifty-eighth member of the Spotify family. A special occasion deserves a special playlist, O Canada!

 

 

 

 

 

 

 

 

 

New Browse category: Folk & Americana

Folk&Americana730x400
 
If you’re like us, you’ve got a long list of fall activities lined up. Hayrides and apple picking with friends and family, getting lost in a massive cornfield maze, making it all the way through that horrific haunted house, carving creepy jack-o-lanterns, and drinking copious amounts of pumpkin-spice flavored beverages.

OK – so we might not actually do any of those, but if we did, we’d have the perfect soundtrack thanks to the newest addition to Browse: Folk & Americana. We’d let the satisfying crunch of leaves beneath our feet mix with Autumn Acoustics as we got Lost In The Woods, or we’d take in the season’s fiery foliage as the sweet sounds of Bluegrass played on in the background.

So, this fall, with the back to school bells still ringing in our ears, let’s enroll at Folk U(niversity) and make our way from the Roots to the Pulse of Americana. Dig into The Southern Highway Chronicles or some deep, dark Southern Gothic. Trace the genealogies of traditional folk songs still being performed today by the likes of Ed Sheeran, Damien Rice, and Marcus Mumford in playlists like Word of Mouth and Fare Thee Well. Or, venture out into the vast expanse of Indie Folk and the rising Roots Revival.

Have you mastered Essential Folk? Why not dive into a new micro-genre like Stomp & Holler? (Just be sure to mind your “Hey’s” and “Ho’s.”) Intrigued by the combination of washboards and wah-wah peddles? Check out the Ben Miller Band and the other edgy, innovative artists of modern Blues & Roots Rock.

From the current pop hits of Folk Pop and The Nu-Modern to the pivotal historical moments featured in collections like Folk Music At The Gaslight Café, there’s something sure to please everyone from the folk newbie to seasoned listener alike. So, go ahead and get folked up!

Folk_Americana

 

 

 

 

 

Enjoy millions of songs on your Amazon Fire TV with Spotify Connect

Amazon Fire TV
From today, music lovers in the US can enjoy Spotify on their Amazon Fire TV using their mobile or tablet as a remote.

Using Spotify Connect on your Amazon Fire TV allows you to control your music using the Spotify app on your mobile or tablet. You can seamlessly switch your favorite music from your mobile to the TV and continue to make calls, use other smartphone apps and go out of wifi range, all without interrupting the music.

You’ll need a Spotify Premium subscription to use Spotify Connect – try it for free here.

Enjoy the music together.

 

 

 

Introducing Spotify for Brands Video Ads

Brands_SponsoredSession

The world is listening…and now, watching.

Spotify for Brands, Spotify’s marketing platform, is launching two new video ad experiences that will now be seen around the world by our 30 million-plus free user base: Sponsored Sessions and Video Takeover. Watch this video to see how they work.

Spotify Free users can watch a brand-sponsored video spot (aka a Sponsored Session) in exchange for 30 minutes of uninterrupted music. Brands can also sponsor a video ad break on desktop with a Video Takeover. Both formats are delivered in a 100% viewable environment and give our brand partners 100% share of voice.

“Our audience is incredibly engaged so we are delivering an advertising experience that enhances their time spent on Spotify and connects them to the music and brands they love,” says Jeff Levick, Spotify’s Chief Business Officer.

Spotify for Brands’ partners for these new formats include Coca-Cola, Ford, McDonalds, NBC Universal Pictures, Target and Wells Fargo. They’ll reach a highly engaged audience that spends an average 146 minutes a day listening, dancing or singing along to Spotify across multiple devices.*

“These new video ad units give us the opportunity to be a small part of people’s everyday passion for music and create better experiences across Spotify,” says Ivan Pollard, Senior Vice President of Connections at The Coca-Cola Company. “Spotify are great partners in helping us execute new ways of connecting with people on their platform leveraging data, intelligence and creativity to bring a little refreshment to an already uplifting experience with music.”

Video ads will be available beginning in October in United States, United Kingdom, Germany, France, Spain and Sweden, and are coming to additional markets in 2015.

Interested in how brands live across Spotify? Visit our Spotify for Brands website to learn more, and follow the team on Twitter and LinkedIn.

*Spotify internal data, April 2014

 

Members of the Spotify Community visit our Stockholm office

Within the Spotify community there is a core base of dedicated Rock Stars who go out of their way to help everyday users resolve their issues and keep the brand alive,” Dan, Spotify Community Rock Star.  

Daniel Ek

Last week we welcomed seven of our Community Rock Stars to the Spotify headquarters for a three-day Rock Star Jam in Stockholm.

The Community Rock Stars met members of our Design, iOS, Android, Desktop, and User Research teams, and got to hang out with our co-founders, Daniel Ek and Martin Lorentzon.

Daniel and Martin thanked them for their invaluable contributions – over 50,000 questions answered in Community in the last year.

Natasa

Here are some of our Rock Stars’ impressions on the visit:

“We got to speak to the Leads/VP’s of most departments,” said Rock Star Dan Howell, 32, from the UK. “They dedicated time out of their busy schedules to see us and it all went to make this a magical trip for everyone on board. “When Martin [Lorenzton] came into the room you could immediately sense his fun personality.”

For 22-year-old Peter Doggart from the UK, meeting the other Rock Stars was the highlight of the Jam. “With the Spotify Community being large and international, it was amazing to finally get the majority of the team together in one place. Being in the Spotify office talking to senior members of the team was amazing–we were definitely made to feel appreciated and special.” 

IMG_0913

Texas-native Matt Suda, 18, said his favorite moment at the Rock Star Jam was speaking with Daniel Ek. “Daniel said his favourite feature was ’repeat one’. I was the one who pushed for a ‘repeat one’ mode [in the Community Ideas board], so I was happy and shocked to hear that he enjoys it as much as I do.”

The other Rock Star Jam attendees included Marco Hülf from Germany, Jyri Väätäinen from Finland, Josh Nicholson from the United States, and Joe Wylot from Poland.

The Community Rock Star Program was launched last November and now has over 60 members who consistently answer questions, chat with Spotify customers, and discuss music in the online forums.

Come this way if you want to join our Spotify Community.