Spotify (/ˈspɒtɪfaɪ/; Swedish: [ˈspɔ̂tːɪfaj]) is a Swedish[6] audio streaming and media service provider founded on 23 April 2006 by Daniel Ek and Martin Lorentzon.[7] As of September 2024, it is one of the largest providers of music streaming services, with over 640 million monthly active users comprising 252 million paying subscribers.[4][8] Spotify is listed (through a Luxembourg City–domiciled holding company, Spotify Technology S.A.[1]) on the New York Stock Exchange in the form of American depositary receipts.
Spotify offers digital copyright restricted recorded audio content, including more than 100 million songs and 6 million podcast titles, from record labels and media companies.[8] Operating as a freemium service, the basic features are free with advertisements and limited control, while additional features, such as offline listening and commercial-free listening, are offered via paid subscriptions. Users can search for music based on artist, album, or genre, and can create, edit, and share playlists. It offers some social media features, following friends and creating listening parties called “Jams”.
As of December 2022, Spotify is available in most of Europe, as well as Africa, the Americas, Asia, and Oceania, with a total availability in 184 markets.[9] Its users and subscribers are based largely in the US and Europe, jointly accounting for around 53% of users and 67% of revenue.[10] It has no presence in mainland China where the market is dominated by QQ Music. The service is available on most devices, including Windows, macOS, and Linux computers, iOS and Android smartphones and tablets, smart home devices such as the Amazon Echo and Google Nest lines of products, and digital media players like Roku.[11] As of December 2023, Spotify was the 47th most-visited website in the world with 24.78% of its traffic coming from the United States followed by Brazil with 6.51% according to data provided by Semrush.[12][13]
Unlike physical or download sales, which pay artists a fixed price per song or album sold, Spotify pays royalties based on the number of artist streams as a proportion of total songs streamed. It distributes approximately 70% of its total revenue to rights holders (often record labels), who then pay artists based on individual agreements.[14] While certain musicians have voiced objections to Spotify’s royalty structure and its effect on record sales, others laud the service for offering a lawful option to combat piracy and for remunerating artists each time their music is played.[15]
History
Spotify was founded in 2006 in Stockholm, Sweden,[16] by Daniel Ek, former CTO of Stardoll, and Martin Lorentzon, co-founder of Tradedoubler.[17][18] According to Ek, the company’s title was initially misheard from a name shouted by Lorentzon. Later they conceived a portmanteau of “spot” and “identify”.[19]
Early international launches
In February 2009, Spotify opened public registration for the free service tier in the United Kingdom.[17] Registrations surged following the release of the mobile service, leading Spotify to halt registration for the free service in September, returning the UK to an invitation-only policy.[20]
Spotify launched in the United States in July 2011, and offered a six-month, ad-supported trial period, during which new users could listen to an unlimited amount of music for free. In January 2012, the free trial periods began to expire, limiting users to ten hours of streaming each month and five plays per song.[21] Using PC streaming, a similar structure to the one used today allowed the listener to play songs freely, but with ads every 4–7 songs depending on listening duration. Later that same year, in March, Spotify removed all limits on the free service tier indefinitely, including mobile devices.[22]
In April 2016, Ek and Lorentzon wrote an open letter to Swedish politicians, demanding action in three areas that they claimed hindered the company’s ability to recruit top talent as Spotify grew, including access to flexible housing, better education in the programming and development fields, and stock options. Ek and Lorentzon wrote that to continue competing in a global economy, politicians needed to respond with new policies, or thousands of Spotify jobs would be moved from Sweden to the United States.[23]
In February 2017, Spotify announced the expansion of its United States operations in Lower Manhattan, New York City, at 4 World Trade Center, adding approximately 1,000 new jobs and retaining 832 existing positions.[24] The company’s US headquarters are in New York City’s Flatiron District.[25]
On 14 November 2018, the company announced 13 new markets in the MENA region, including the creation of a new Arabic hub and several playlists.[26]
