When Daniel Ek launched Spotify, a stated goal was to diminish music piracy by giving piracy a competitor. Spotify accomplished this by offering a competitive service which pays rights holders for the music. As Ek suggests in his latest interview, we are just in the beginning, “…there’s a billion people doing it [listening to music online]. If they contribute to a legal service of any kind, that’s a huge win.”
Ek goes on to say “We are in a growing industry, not really an industry where we’re fighting for market share.” The music labels are all adjusting to make paid streaming services a viable distribution channel (they are souring on free ad-supported services). The discussions have turned — from allowing music to be licensed as long as the upfront payment is large enough — to how can we get more people to pay for streaming, is a free to premium (freemium) model working, shall we offer an exclusive window..etc.?
Although music can be a soundtrack behind other activities, Spotify, Pandora, Beats Music and all the rest of the streaming services arriving on our devices are all competing against the same thing, people’s attention and awareness that streaming music is available and affordable.
As far as potential market, Ek says,
I’m certain that if we can get the billion-people-plus that are consuming music online and move them into a model like Spotify, the industry would be considerably bigger than it is today.