A Look Back at Spotify's U.S. Launch for Clues to Apple Music's Future
We are, of course, talking about the stateside launch of Spotify, which arrived here nearly four years ago, on Jul. 14, 2011. Like Apple and its MP3 player, Spotify wasn't the first streaming service, it was just, at the time, clearly the best. And that's all you need these days, when people are more than happy to drop whatever they like that moment if a better (read: easier) option appears. It's the very reason we're looking back at Spotify's launch; to gain some perspective on Apple's own today. (For our review of the app, go here.)
Every report we read from the week of Spotify's launch was glowing, excited at the prospect of a slick and free option for legal listening. That excitement, generated by tech and music industry close-watchers, eventually translated into a slow bleed into the culture, such that it's common to hear friends and colleagues mentioning the company in casual conversation. "I'll send you a playlist." That it's on Spotify doesn't, now, require mentioning.
Spotify expected 50 million American users its first year, according to a marketing deck (maybe not the first place you'd want to look to for realistic projections) obtained by AllThingsD (since transformed into Re/code, since bought by Vox Media... the wheels, they turn) at the time. After its first year the company had generated... well, it didn't say how many listeners that first year generated. By 2014 the company had more paid subscribers in the U.S., 3 million, that it had had at launch in the seven European countries it had been available in for three years (about 1.6 million paid subscribers).
In 2010, the year before Spotify came to the U.S., streaming (paid and free) generated 3 percent of the global record industry's revenue, according to the IFPI. In 2014, it was 15 percent of the record industry's money, mostly at the expense of CDs (still worth 36 percent of the market last year). And recent numbers crunching by Billboard shows that the model is (maybe) working.
“What Spotify seems to be doing is solidifying a perception that music should be free,” analyst Mark Mulligan told the Times the week of Spotify's U.S. launch. Spotify co-founder and CEO Daniel Ek has maintained since the beginning how important the freemium model is to growing the streaming business, helping it reach a scale that would see the record industry's bank balance grow after years of contraction.
Over the past four years, has Ek done the legwork for Apple and its new service, laying down comprehension ahead of Apple? That Times piece ended with Ek musing: "It ought to be as simple as pressing play and it works. And ultimately when you get to that point, that’s when people are prepared to pay. People are prepared to pay for convenience.”
And now, they might be.