Spotify is a music streaming sensation. The company has survived in an industry where many have failed and young potential startups  fear to thread. Spotify is one of the most popular if not the most popular music streaming service. The company provides DRM-protected content from a range of major and independent record labels, including Sony, EMI, Warner Music Group and Universal.


Music can be browsed by artist, album, record label, genre or playlist as well as by direct searches. The depth of the catalogue and the speed of music streaming makes have contributed to the success of the company. Spotify is also social. You can share music on the Spotify platform, Facebook, Twitter, your blog and via email. You can follow other people too.

As of December 2012 Spotify had recorded 20 million users, 5 million of them paying monthly.

Spotify founder and CEO Daniel Ek shared these  lessons on how Spotify became a big player in the music streaming service globally in various interviews.You could apply some of these tips to your own startup or share with a friend who is already in the music industry. Aspiring entrepreneurs who intend to start music streaming services will find this most useful.

1. Goal: For us it is about getting it out to more people.  We launched in the U.S. one year ago. We want to bring music to every single person and bring it to every moment of their life.

2. Goal :My ambition is we want artists to be able to afford to create the music they want to create, and if it takes them five years to sit down and make the album they want to make, they should be able to afford that. That’s my goal.

3. Strategy: I think the social part is really core to this. Social isn’t just about engaged people who are already on the platform. It’s also about sharing that music on other networks.

4. Growth: What we’re doing is we’re investing in growth. As I said earlier, we want to reach every single person on the face of this planet. And that means we’re going to forego profits, to keep investing in growing.

5. Record Labels: When the labels eventually saw the extent of the service, they got a much better idea because Spotify’s content is so quick to access. That has been an immense help when trying to figure out the business model behind this.

6. Advertising: We can facilitate a number of other things for brand advertisers such as mood targeting. We can also target demographics more clearly than offline media channels.

7. Growth: We want to provide tools so that social networks can work with us and so that developers can build interesting things on top of Spotify.

8. Model: I feel that today there’s still an underlying problem in simply playing whatever content you want, when and as many times as you want it, and that’s the problem Spotify’s looking to solve.

9. Model: We look at the sharing of music as really, really important for our business. We’ve found that the more social our users are — i.e., they’re sharing music — the faster they grow their own music library. [And] the faster they grow their music library, the faster they become paying customers.

10. Product: We have over 1bn playlists that people have created, and almost a third of these were people saving whole albums. Whenever people say the album format is dead, we don’t believe that at all.

11. Product: The big paradigm of sites within music discovery has been editorial versus the algorithms. But the more we thought about it, actually they’re not mutually exclusive. You can marry them together.

12. Competition: People do like to listen to the entire album. On iTunes, they might cherry-pick songs because of the [a la carte sales] model, but with the access model there’s no additional cost to listening to the entire album, so that’s what they do.

13. Feedback: Another thing we’ve heard a lot more recently is that artists are saying to us ‘There are 20m songs now on Spotify, so how do I get heard?’ We’ve been really thinking hard about how we solve these problems. We’ve been working on a new version of Spotify which we think solves this problem.

14. Trend: People are consuming a lot more music, which in itself is a good thing for the music industry. And as more and more smartphones come around, people are starting to pay for music again.

15. Lesson: With music, rediscovery is a critical part of how you listen to music, but all the internet services are missing it.

16. Future:  We’ve paid over $200 million to rightsholders already, and it’s still in the early days. So for me, part of it is talking about the growth story of how we get the music industry back to where it used to be, and probably even past that.

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