14 DAY TRIAL // The popular music streaming service Spotify is just closing in on a year. With all of the hype it generated and the actual successes it enjoyed it would be easy to assume that it's been around for longer. But CEO Daniel Ek doesn't let it go to his head, saying that despite a great first year there is still a lot of work to be done and the company is in it for the “long haul.”
“Spotify has a long way to go but this continued support from the music industry in the face of a recession and rampant piracy has made the difference and I feel that we are set up to succeed with this kind of willingness to innovate and try new things from the music industry,” the CEO writes.
He goes on to list some of the accomplishments the service has managed, despite critics of its business model, but also to make it clear that it is only just getting started and the service but also the business are far from perfect. Still, Spotify is one of Europe's biggest subscription-based services, if not the biggest, with hundreds of thousands of customers, and Ek claims that it is one of the biggest generators of digital music sales, this despite most users being unaware that they can actually buy the music with Spotify.
However, he believes that this is just a very small beginning and that the overall music industry can grow to become a $40 billion to $50 billion business, presumably with Spotify's help, and that with the streaming service illegal downloads can drop tremendously. But for this to happen the music industry has to start thinking of alternative revenue streams and other business models and an important step towards this, not surprisingly coming from a music streaming service CEO, is to drop the per-play fees the labels currently charge.
As for the product itself, Ek also believes that it has a long way to go and that it is still a work in progress. “There are a couple of focus areas for us now in terms of developing the product. Besides better monetisation, those areas include better library handling, making Spotify socially capable as well as significantly improving our portability,” he said.