The way music is streamed evolved considerably over the last decade, and while many factors contribute to it, to say that the introduction of Spotify was a milestone will not be wide of the mark. Today, the app is no longer just a music streaming site but a diverse and expanding platform for a number of artists and users worldwide.
Let us look at some of the staggering data and growth statistics Spotify seamlessly aced in just a little over a decade since its introduction, usage statistics, and much more. But, before we discuss that, let’s have a brief introduction with Spotify and how the idea of the app came about –
Table of content
- The idea behind Spotify
- Spotify’s History, legality, and initial growth
- Spotify’s growth and user statistics 2021
- The growth trajectory and critical timelines
- Important Spotify figures to know 2021
- Why is Spotify so popular?
- Spotify’s business model and Controversies
- Some lesser-known facts about Spotify
- Expected growth later in 2021 and scope
The idea behind Spotify
Content piracy has always been a massive issue for several entertainment industries, such as performance arts, movies, etc., including music.
For those unaware, content piracy is a practice of unauthorizedly duplicating any copyrighted content and then selling it at a much lower rate in the grey market. The practice, however illegal, has afflicted the music industry for a long time.
And as you must have guessed, the chief aim behind founding Spotify was to eliminate this particular practice, giving artists the recognition, a platform to host work, and to be paid for it, all in a legal and easy manner.
Spotify’s History, legality, and initial growth
Founding of Spotify
Two Swedish men Daniel Ek and Martin Lorentzon, in response to the growing piracy problem in the world of music, came up with the idea of this small start-up in Stockholm, Sweden.
The start-up was founded in 2006 and launched two years later, i.e., in 2008, after persuading record labels into sharing content for an aggregate 20% stake.
The story behind the name ‘Spotify’ is yet another interesting incident where the words shouted by Martin Lorenzo in another room were misheard. Although, later on, the combination of words’ spot’ and ‘identify’ was sought out to be a perfect explanation for the name.
Before Spotify came along, many were guilty of indulging in piracy; therefore, introducing a platform that seemingly intrigued everyone, provided a better alternative to pirated music, and also compensated the music industry was not child’s play.
Spotify allowed its users to access, listen and download millions of tracks over the internet on any device, which earlier was restricted to buying mp3 files from iTunes or any similar platform.
There is no copyright infringement as the person listening is not a direct owner of the track, and Spotify does go the legal way in providing the music by paying the rightsholders.
Though the platform has been under criticism by recording artists, the music industry, and the rival platforms, especially Apple music, the growth of Spotify right from the initial phase has been staggering.
Early notable international growth
Spotify started its international expansion back in February 2009 with a public registration in the United Kingdom. A surge in free service registration was noticed when the company launched the mobile service, which was later halted in the September of the same year and was made into an invitation-only service for the UK.
Two years later, i.e., in July 2011, Spotify was launched in the USA. The initial six months, the service offered was a free trial for the users, which started to end in 2012, and users were limited to only 10 hours of streaming per month and five plays per song.
Another massive expansion for the company was on 14th November 2018, with an expansion announcement in 13 new countries from the middle east and north African region.
Spotify’s growth and user statistics 2021
As of 2021, Spotify undoubtedly stands at the paramount of success with an ever-expanding and booming user base. There are 345 million active users of Spotify as of the fourth quarter of 2020, with 115 million of which have a paid subscription.
Comparing the current growth with that of previous years suggest a 27% (74 million) increase in the users and a 25% (31 million) increase in the subscribers.
With 320 million active users and 134 million premium users in the third quarter of 2020, Spotify usage saw a fall as it entered the year 2021, given the coronavirus pandemic.
The pandemic, although it brought an unprecedented and unforeseen halt in Spotify’s growth for a little while, it did not take much time for the platform to recover the losses and get back on track.
The growth trajectory and critical timelines
Talking about the early growth trajectory – back in March 2011, Spotify only had a million paying users around Europe. The platform’s total earnings were worth $244 million, with a loss of $60 million for the same year. Though the dip must have seemed a massive one the time, what lay ahead was just a plethora of users and unmatched accomplishment.
The numbers doubled to a brilliant 2 million in just over six months, crossing a whopping 20 million mark globally by the December of 2012.
The monthly active users (MAU’s) as of June 2017 were 144 million, which once again doubled in the span of two years, reaching 232 million in the second quarter of 2019. Over 100 million of which had already taken the premium subscription of the service.
The user count has been going uphill for Spotify ever since its initial launch back in 2008 for all the obvious and deserving reasons. However, the pandemic has not been exactly good news for the service.
The trail of events leading to growth
The massive fandom and booming user base of the platform did not just happen overnight. There were many events and steps to progress over the years that resulted in Spotify as we know it today. Below are some of those critical growth timelines.
The integration of the app for mobile phones back in 2009 was a critical aspect of gaining all those users and kick-starting the journey to success.
The introduction of Spotify to the US market in 2011 and its integration with Facebook in the same year are both contributing factors.
The web-based player in 2013, the student and family plan in early 2014, the discover weekly in 2015, and the uber and daily mix in the year 2017 are all key timelines for the app.
Important Spotify figures to know 2021
- Spotify’s share in the global streaming market as of 2021 is 34-36%.
- The total number of songs on Spotify currently lies somewhere over 70 million, with as many as 60,000 new additions every day in 2021( 22 million per month), while the figure was 40,000 in 2019.
- The number of subscribers as per data by Spotify for the fourth quarter of 2020 is as follows – North America – 83 million, Europe – 121 million, Latin America – 76 million, the rest of the world – 66 million.
- Daily listeners make for 44% of total users of Spotify.
- 2.2 million podcasts are available on Spotify currently.
- There has been a 108% year-on-year increase in podcast listeners as per the fourth quarter of 2020. The podcast subjects that saw a major (year-on-year hike include – news and politics (140%), health (201%), and educational (81%)
- In response to one of the controversies, Spotify has claimed to have paid out 21 million euros to rights holders since launch.
- The most-streamed artist as of 2021 is The Weeknd, with almost 72.2 million monthly listeners.
- The average hours spent on Spotify listening stands at 25 hours.
- An average user listens to at least 41 unique artists per week.
- $2.6 billion was the funding money Spotify made before it went public.
- Spotify’s valuation was $19 million ahead of 2017 NYSE Listing.
- 52% of users prefer listening to music on their smartphones, and 55% have their facebook linked to Spotify.
- 55 % of Spotify listeners in the United States are aged below 35.
- ‘shape of you’ by Ed Sheeran is the most streamed track as of February 2021, with over 2.7 billion plays.
- A third of users’ listening time is spent on Spotify-generated playlists, while another one-third on the user-generated ones.
- With more than 21 million Facebook followers, Spotify has seen a hike of almost 470% ever since 2013.
Why is Spotify so popular?
Is all that buzz for nothing?
No, Spotify changed the way people streamed music and influenced the whole music industry, and there are a plethora of worthy reasons to advocate for the success platform got.
Let us have a look at some features that set Spotify apart from other platforms in its league and arguably have to contribute to the hike in users it saw time and again.
Streams anywhere anytime
Breaking the conventional boundaries, Spotify is not restricted to an Android, iOS, or a web app like other services. Spotify Connect lets you switch to a plethora of playback devices; whether it is a new speaker at home, your TV, or desktop, etc., one could easily manage their listening experience through their smartphones as a controller.
What’s more, this jamming session can also run on non-phone devices. Amazon, Google, among various other integration modes, there is almost nothing that doesn’t work with this Spotify, and this very convenience and access it offers is unmatchable.
Discover, Curate, and Interact
Unlike other streaming services, Spotify focuses on not only music but also the overall experience of the users, and it has undoubtedly been one of the major selling points for the app.
The discover weekly feature that generates unique playlists for the users each Monday based on the listening habits was launched in 2015 and had clearly been a successful strategy for the app. There was a hike in users and subscribers at the time, and it continues to intrigue people worldwide as they are introduced to new music seamlessly time and again.
The recent additions to enhance the experience and add value to exploring new artists, genres, etc., include the Spotify wrapped and your tops songs. These are also accessed with important information about a person’s listening habits, such as total minutes listened, favorite bands and genres, etc.
Creating and sharing playlists
There are currently over 22 million user-created playlists on the platform, and listening and recommending music has never been easier, let me tell. Another great advantage of this curating feature is that artists themselves indulge in the activity, letting fans know what they like, recommending, and bringing to light brilliant unheard tracks.
One could also share playlists across several social media platforms and apps, given the integration, making it easier to give and take suggestions as well as promote.
The magic of podcasts
Podcasts always have been there but not as effortlessly visible and in a variety as they are after Spotify introduced the feature. As a matter of fact, the entire growth Spotify witnessed in 2020 was based on a podcast strategy.
A whopping $150 million was the investment made by Spotify in curating their platform’s original podcasts, luring the majority of non-musical heads towards the platform.
With over 2.2 million podcast listeners in 2021, there has been a 108% increase over 2020 with podcast recommendations and editorially curated playlists.
From everyone for everyone
Boost to budding talent
As much as Spotify is for famous artists, it is for the budding ones too. Putting music in front of the world has never been easier for all the small-scale, those experimenting, and independent artists. The discover feature, the ability to uncover tracks based on locations, the underground playlists, and the features to generate royalties for all that you put out work in favor of these artists.
Live sessions for the feels
Since pandemic put a hold on live concerts and music sessions with artists, the feature of Spotify sessions by the app has dramatically eased this gap. Famous artists record exclusive live sessions at Spotify’s headquarters, capturing the essence of jamming sessions and concerts while also providing a chance for fans to know and listen to their favorites differently.
The authority of insights
Spotify’s insights to the artists on their music, such as the age group of their listeners, the gender-based division, when and how they usually stream daily with the help of graphs, are constructive for artists in more than one way.
Spotify’s business model and Controversies
It is vital to understand the business model of Spotify to comprehend how the platform grew into becoming one of the world’s most popular music streaming sites in just 13 years.
A business model is also from where most of the company’s revenue derives from, and therefore can significantly help acknowledge the idea behind the critical steps taken over years.
The artists and royalties
The first step is to get a record label or any rights holder to sign licensure that allows Spotify to host their work on the platform. It is where all the content on the app becomes legal. Artists or person in charge of original work is compensated with royalties, with amount determining factors being –
- Number of streams on content
- Artists contract
- Location and currency
While several factors play a role, the Spotify stats have confirmed that artists are paid $0.006 – $0.0084 per stream.
The Freemium model of Spotify
Which started as an invite-only application has now turned wheels into becoming a perfect example of a freemium model. For those unaware, Freemium is a model based on services that, for the most part, is free but requires one to pay for a premium subscription to access some limited features on the app.
While the second slab, i.e., the premium, is funded through subscribers who pay a monthly subscription fee choosing the plan from a set of three, the free mode is monetized through the reoccurring in-between ads.
Various kinds of advertisements are shown, utilizing their potential fully and maybe even convince the person to go premium. These include –
- Welcome back ads
- Auto ads
- Video ads
- Display ads
- Advertisers page
- Homepage takeover
- Sponsored sessions
The additions to the platform
Spotify is continuously improving and modifying its business model, which is a given to thrive in this competitive world, especially when one’s rivals are platforms like Apple Music, Pandora, etc.
As mentioned above in the article, Spotify has already launched its series of original podcasts; and one can say they were Netflix-inspired. The decision was highly appreciated and brought in a plethora of users and subscribers. Not to mention the skyrocketing effect it had on the revenues and profits.
Spotify sessions were another big decision by the platform, the full potential of which is yet to be realized.
Responsibilities with authority and related backlashes
Music plays an integral role in most lives, and therefore the connection people have formed with a platform that understands and supports their experience is no joke. However, as spiderman said, ‘with power comes responsibility’ sits just right for the given scenario.
As Spotify’s business boomed with expanding gross margins and market share, the pressure to cater to the users’ needs and the artists who put their faith in the platform grew intense.
The company faced several backlashes over allegations of acquiring deals from record labels, with a whopping 87% of music on the app owned only by four big labels: Universal, Sony, Merlin, and Warner. Further debate went through on whether or not Spotify must declare itself as a label or not.
Another backlash faced was when artists raised their voice against the low payout rates offered on the platform. However, in February of 2021, Spotify claimed that it had paid an estimated 21 million euros to the platform’s artists ever since it was launched.
Some lesser-known facts about Spotify
- One could recover deleted or old playlists on Spotify from their accounts.
- Spotify allows access to lyrics to several songs featured on the app.
- Song radio and artist radio are some of the app features that get updated every minute, allowing users to explore new music.
- 11th November 2016 till date is known as the most musical day on the platform.
- The songs can be matched with the users’ current mood, e.g., angry, happy, sad, etc.
- The top break-up song on Spotify is One Dance (feat. WizKid and Kyla) by Drake.
Expected growth later in 2021 and scope
The company has high expectations for the year 2021 and has anticipated the user count to reach 407- 427 million by the end of the term, followed by premium subscribers getting 172-184 million.
The future has much in stock for Spotify, with vast possibilities to expand and reach all those not yet using the platform and increase the value on the technological front. Let’s see what is that we could expect from Spotify in the near future –
The device integration –
Although Spotify is already supported on various devices from smartphones to desktops, TVs, etc., the day is not far when this integration takes hold of wearables such as headphones, earplugs, watches, android wear, and more.
It will certainly make Spotify more ‘exercise friendly’ and boost the user and subscriber count for the service once again.
Improved statistical analysis and user experience –
Spotify still faces hefty competition algorithm-wise from platforms like Pandora to precisely understand and recommend songs to the users. There is scope for improvement with an algorithm that not just take recommendations from others’ playlist and put it forth but actually analyzes the songs to find similar results.
There is no denying a better experience lies ahead as Spotify understands the users’ needs and the tough competition.
Gone are the days when music boxes and iPods brought jamming sessions to life. Spotify and the sea of change it brought in how music is now streamed is honestly much efficient and truly appreciable. However, there is no denying that there’s a much longer way to go for the platform with noteworthy events lying ahead.
Other prominent music streaming platforms such as Apple Music and Amazon are catching up fast with Spotify in an attempt to recapture the attention of the audience they lost over the past few years. And, though the road doesn’t seem bumpy for Spotify as of now, there is no telling how events might turn out.
But, for all the music lovers, this race to the top only means a better, consistent, and fruitful experience with music as both ends try to serve better. Happy Scrolling!