5/9/2023 0 Comments Spotify martin lorentzonThe free version was supposed to bind the consumers to the platform. But Spotify did not make enough money yet, so they had to push the paid version even more. The platform proved to be of high potential, as the free version did very well. Its exclusive status led to it going viral, and due to the limited amount of invite links that were available, a vast majority of users were only able to use the platform by taking a subscription. This way, Spotify was able to manage the level of growth while also creating exclusivity. Every user would get 5 invite links to share with friends. Spotify directly started using a freemium model. ![]() Now that the agreement had allowed Spotify to stream major music from its platform, it was Spotify’s moment to show that the platform could be the solution to the piracy problem. He literally slept outside of the label’s offices to get a meeting and kept showing up unattended at offices for 2 years to argue about the license deals. But also because of Daniel’s extreme persistence. This agreement had taken place due to the fact that the revenue streams of the artists were decreasing massively, so the record labels didn’t have much to lose. As part of the agreement, they would give Spotify access to their catalogues as a sort of experiment. The platform started to take shape when an agreement was made in which 4 major record labels and a leading representative of independent artists. But, as the piracy of music kept growing, their minds changed. The beginning of SpotifyĪt first, the music industry wasn’t enthusiastic about Spotify streaming music for free. The platform made it possible to stream and share music and playlists for free. Daniel and Martin had been building the platform for 2 years as it went live in 2008. They decided to create a platform to stand up against illegal sharing and let the artists earn money at the same time. ![]() As a consequence, artists were earning less and less income. The two men recognized a rising problem: illegally shared music. In 2006, Spotify was founded in Stockholm by Daniel Ek and Martin Lorentzon. This blog is the first of a series of articles on famous companies and the search for their working business model.
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