A 2007 study concluded that 12.5 billion dollars in total output was lost in the U.S. annually because of music piracy. It was often claimed radio was great but users wanted to choose their own music. That left the market open for a small Swedish company— “Spotify”— to make its way in.

Spotify was founded in 2006 and made its way to the US in 2011. It started with an invite only beta program for the free trial and quickly garnered favorable reviewers. Yet it faced an uphill battle to reach the top.

One reason for the company’s delayed entry into the US market was because of music rights. It was a complicated business that cost Spotify 9.8 billion dollars from its launch until 2018. Clearly, the company was onto something that piqued the curiosity of some major brands. Now it seems every major tech player has its own music streaming platform. Apple dropped iTunes and created Apple Music. Amazon created Amazon music. Google created Google Play Music and then YouTube music; But Spotify kept its spot at the top thanks to its freemium model, where users can listen for free with ads or pay for a subscription without ads.

By the end of 2019, Apple music had 60 million paid subscribers worldwide. Amazon music had 55 million subscribers worldwide, nearly all of which were paying subscribers. Chinese company Tencent had 39.9 million paying subscribers, while Spotify had 124 million paying subscribers.

Platforms like Apple Music are more exclusionary, asking customers to pay after their free trial is up. Apple even tried to beat Spotify’s free version back when Apple music was launched. Free only makes sense for customers, which is the major reason why Spotify is so popular today. However, free is not so great for musicians. As Spotify gained popularity, artists started to wonder why they were not seeing the financial gains they were used to with CD sales and downloads.

In 2019, Spotify announced it was moving its music focus to a more general audio focus to broaden its offerings and widen its global lead on competitors. It acquired the Joe Rogan Experience — a Spotify-exclusive audio and video show hosted by Joe Rogan, an American comedian and television host— early in 2020 and penned exclusive podcast deals with celebrities like Kim Kardashian.

The company’s stock jumped by eight percent at the announcement of the Joe Rogan acquisition alone. Just after these podcast deals were penned, the global pandemic started taking its toll on the economy. Nevertheless, Spotify is one of those few companies that weathered the storm.

Sources: Open Spotify, National Public Radio, Consumer News and Business Channel