Berlin / Stockholm
Ten years of Spotify: pioneer of the streaming revolution
Always and everywhere listen to the song you want? It was unthinkable. Teenagers have once spent countless hours in record stores to discover new albums.
When a favorite song came on the radio, it became hectic on cassette. And the local pub was often selected for the best jukebox. But then came the internet, which completely transformed the music industry.
It was only when the invention of the MP3 format took place in the 1990s that all recorded music ended up on the Internet – as an illegally copied copy of the once-overwhelming record companies. The music exchange Napster became the symbol of the new era. When the business model of the industry seemed to disappear, the rescue of Apple came: the iPod player and the iTunes downloads for 99 cents per song persuaded consumers to once again pay money for music. Finally, the legal purchase was as easy as before, only the illegal copy. The next step was streaming, where the titles do not have to be stored on the device, but played directly from the internet. And the success of this model is inseparable from the name Spotify.
The startup from Sweden, which went online in several European countries after a deal with the music companies on 7 October 2008, was far from the first streaming service. Platforms such as Rhapsody or Napster, reborn as a legal offer, have been trying to determine the model for years. The idea of opening catalogs of millions of songs for a monthly fee seemed attractive, but was hampered by implementation problems.
But Spotify was launched at just the right time: Apple's iPhone paved the way for the smartphone as a ubiquitous mobile computer – and the expansion of the mobile internet offered the constant connection. Yet the Swedish company had to overcome many obstacles.
A central point of contention was that founder Daniel Ek believed in a so-called "foreign" model: Spotify can be used free of charge, even if you have to take advertising breaks and restrictions on skipping numbers. But there is also a payment option. The thesis of Ek: with a free model you can first get the users on the platform and eventually convince them to pay for a subscription. The music industry, plagued by the trauma of escalating online piracy, initially did not like this approach.
Because the concept also meant that artists and music companies have patience and have been satisfied for years with meager revenue from the free version of Spotify. Musicians such as Talking Heads frontman David Byrne or Thom Yorke of Radiohead complained of miserable compensation for millions of views, Taylor Swift temporarily removed their music from Spotify media.
In the long run, however, Ek should be right: Spotify now has 83 million paying subscribers with a total of 180 million users. The Swedish service is therefore the clear number one in the streaming business – before Apple, which comes from the market share of the iPhone, even without a free version to more than 50 million subscribers. Thanks to the success of the streaming system, the total consumer spending on music is also growing after many years of drought.
In Germany, according to a recent study by the IT organization Bitkom, every second Internet user is currently streaming music, and among 14 to 29 year olds it is even two-thirds. Only five years ago streaming music was a marginal phenomenon in this country. At that time, only one in ten internet users had used corresponding offers.
Accordingly, it lasted in Germany until the market changed. Only this summer, for the first time, more money was streaming than selling CDs. According to figures from the German Music Industry Association, services such as Spotify, Apple Music and Tidal rose in the first half of 2018 from 35.2 percent to 348 million euros. The streaming came with a market share of 47.8 percent. At the same time CD trade fell by 24.5 percent to 250 million euros. In Sweden, home of market leader Spotify, streaming has been the highest income area since 2012 and since 2015 in North America.
Many German artists refused for years to offer their music on the streaming platforms. Gradually, artists such as Toten Hosen or Herbert Grönemeyer realized that they also needed these digital channels. One of the last German bands called himself Die Ärzte: "In order to enable a worldwide delivery of genuine Die Arzte music all day long, we will be offering all non-prohibited Die Doctors albums for streaming as from November 16, 2018. "
But they also rely on the good old recordings: "Because we still care about the beauty and the feeling of our works, it will of course still be CDs and vinyl records (these are those big, heavy, round, black discs with the funny ornamental patterns on both sides) »Press release Spotify from 7.10.2008
Study by Bitkom
Message from The Doctors