Spotify Technology SA

Spotify Technology SA

Spotify Technology SA

(/ˈspɒtɪfaɪ/Swedish: [ˈspɔ̂tːɪfaj]), is a Swedish audio streaming and media services provider, founded in 2006 by Daniel Ek. Spotify is incorporated in Luxembourg as Spotify Technology S.A,[5] and is headquartered in Stockholm, Sweden, with offices in 17 different countries around the world.[6][7] It is one of the world’s largest music streaming service providers, with over 345 million monthly active users, including 155 million paying subscribers, as of December 2020.[8]

Spotify offers digital copyright restricted recorded music and podcasts, including more than 70 million songs, from record labels and media companies.[8] As a freemium service, basic features are free with advertisements and limited control, while additional features, such as offline listening and commercial-free listening, are offered via paid subscriptions. Users can search for music based on artist, album, or genre, and can create, edit, and share playlists.

Spotify is available in most of Europe and the AmericasOceania, and parts of Africa including South Africa and Mauritius and Asia. By the end of 2021,[9] Spotify is expected to operate in a total of 178 countries.[10] The service is available on most modern devices including WindowsmacOS, and Linux computers, iOS and Android smartphones and tablets and AI enabled smart speakers such as Amazon Echo and Google Home.[11]

Unlike physical or download sales, which pay artists a fixed price per song or album sold, Spotify pays royalties based on the number of artist streams as a proportion of total songs streamed. It distributes approximately 70% of its total revenue to rights holders (often record labels), who then pay artists based on individual agreements.[12] According to Ben Sisario of The New York Times, approximately 13,000 of seven million artists on Spotify generated $50,000 or more in payments in 2020.[13]


Spotify Technology SA
The Spotify logo
Type of business Public (Société Anonyme)
Type of site
Music streaming service
Traded as NYSESPOT
Founded 23 April 2006; 14 years ago
Stockholm, Sweden[1]:43 [2]
Country of origin Sweden
No. of locations 17 offices[2]
  • Audio streaming
  • Podcasting
Revenue Increase€7.88 billion[3] (2020)
Operating income Decrease€-293 million[3] (2020)
Net income Decrease€-581 million[3] (2020)
Total assets €6.33 billion[3] (2020)
Total equity €2.81 billion[3] (2020)
Registration Required
  • Free: 190 million
  • Premium: 155 million
  • Total: 345 million

(December 2020)

Launched 7 October 2008; 12 years ago


Spotify was founded in 2006 in Stockholm, Sweden,[14] by Daniel Ek, former CTO of Stardoll, and Martin Lorentzon, co-founder of Tradedoubler.[15][16] According to Ek, the company’s title was initially misheard from a name shouted by Lorentzon. Later they thought out an etymology of a combination of “spot” and “identify.”[17]

Early international launches

Former Spotify headquarters in Stockholm

In February 2009, Spotify opened public registration for the free service tier in the United Kingdom.[15] Registrations surged following the release of the mobile service, leading Spotify to halt registration for the free service in September, returning the UK to an invitation-only policy.[18]

Spotify launched in the United States in July 2011 and offered a six-month ad-supported trial period, where new users could listen to an unlimited amount of music for free. In January 2012, the free trial periods began to expire, and limited users to ten hours of streaming each month and five plays per song.[19] In March, Spotify removed all limits on the free service tier indefinitely.[20]

In April 2016, Ek and Lorentzon wrote an open letter to Swedish politicians demanding action in three areas that they claimed hindered the company’s ability to recruit top talent as Spotify grows, including access to flexible housing, better education in the programming and development fields, and stock options. Ek and Lorentzon wrote that to continue competing in a global economy, politicians needed to respond with new policies, or else thousands of Spotify jobs would be moved from Sweden to the United States.[21]

In late 2016, the company launched its “largest [marketing] campaign to date”, by placing large-scale billboards in major cities around the world that humorously mocked users’ listening habits. Spotify’s Chief Marketing Officer Seth Farbman told Creativity that “there has been some debate about whether big data is muting creativity in marketing, but we have turned that on its head … For us, data inspires and gives an insight into the emotion that people are expressing.”[22]

In February 2017, Spotify announced a major expansion of its United States operations in Lower Manhattan, New York City, at 4 World Trade Center, adding approximately 1,000 new jobs and retaining 832 existing positions.[23] The company’s US headquarters are located in New York City’s Flatiron District.[24]

On 14 November 2018, the company announced a total of 13 new markets in the MENA region, including the creation of a new Arabic hub and several playlists, while supporting right-to-left text in their apps.


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