Spotify is a music streaming service that offers both free and premium subscriptions. It has a huge music library of over 20 million songs. While it has over 40 million total users, 10 million are paying subscribers. Spotify generates revenue through subscriptions and advertising, but still operates at a loss due to high royalty payments to music labels and artists. It was founded in 2006 in Sweden and has since expanded globally, partnering with companies like Uber to help drive growth.

1. Craig Send (sendcr)

2. Overview
• Music streaming service
– Free and Premium
• Playlists and social sharing features
• 3rd party apps
• Huge music library (20M+ songs)
• 10 Million paying users, 30 million free users
(May 2014)

3. Financials
• Freemium
– Subscriptions and
advertising
• Private company
• Estimated company
value: $4 billion

4. Financials
• $245M total revenue
in 2011, $558M in
2012 (via Generator)
– 70% of revenue paid in
royalties
• Total losses of $60M
in 2011, $77M in 2012
(via the Journal)

5. History
• 2006 - founded by Daniel Ek and Martin
Lorentzon in Stockholm, Sweden
• Oct 2008 – launched to the public
• 2009 – Mobile app
• Mar 2011 – 1 million users
• Nov 2011 – US launch
• 2014 – over $2B paid in royalties

6. What’s hot?
• Uber partnership
• Spotify Premium for Students
• Not Taylor Swift!

7. Secret Sauce?
• Free Features
– Selection
– Playlists
– Apps
– Radio
– Sharing

8. Story Time
• Daniel Ek – programmer/musician/entrepreneur
• Dropped out of Royal Institute of Technology
• Worked at Tradedoubler, met Lorentzon
• Spotify – an answer to Sweden’s PirateBay
• Convinced record labels using MVP with pirated
tracks!

9. Competition

10. Future Outlook
• User growth
• IPO?
• Profit? -> TBD