After a 15-year decline that made the industry a cautionary tale for all legacy media in the internet age, revenues from recorded music began to improve sharply around 2015. In its defense, Spotify can point to its role in music’s financial turnaround. “If it were up to the labels, he would have failed years ago.” “I don’t believe the industry would have embraced subscription without Daniel’s persistence,” said Richard Greenfield, a media analyst at BTIG Research. And Spotify’s relationship with the music industry, which it relies on for the millions of songs it makes available for streaming, has been fraught since the beginning. Its competition is still a field of giants like Apple, Amazon and Google. Its direct listing could backfire, spooking investors. Spotify’s path ahead, though, is far from clear. Underscoring the company’s self-image as a disrupter, it has shunned the usual circus of an initial public offering in favor of a rarely used - and potentially risky - process known as a direct listing, in which no new stock is issued and insiders can begin selling their stash on Day 1. That is about twice the number of its closest competitor, Apple, which finally entered the subscription game three years ago.Īnd on Tuesday, in a ritual of success for any start-up, Spotify’s shares will begin trading on the New York Stock Exchange with a valuation that could exceed $20 billion.
Yet as Spotify introduced its streaming service in a handful of European countries, it clung to what must have seemed an impossible ambition: challenging the titans of Silicon Valley to become the world’s leading outlet for online music, with a hybrid free-and-paid model that made record companies nervous.Īfter a decade, the start-up from Sweden has proved itself a worthy adversary, with 157 million users around the world, 71 million of whom pay for subscriptions. It was 2008, and the traditional music industry was collapsing. Back in Spotify’s early days, when the company was just a dozen people in a small office in Stockholm, Daniel Ek, a co-founder, liked to compare it to Apple and Google.
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