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Freakonomics Radio
How Spotify Saved the Music Industry (But Not Necessarily Musicians)
Daniel Ek, a 23-year-old Swede who grew up on pirated music, made the record labels an offer they couldn’t refuse: a legal platform to stream all the world’s music. Spotify reversed the labels’ fortunes, made Ek rich, and thrilled millions of music fans. But what has it done for all those musicians stuck in the long tail?
Over the past year or two, Freakonomics Radio has produced a pair of special series on seemingly unrelated topics: “How to Be Creative” and “The Secret Life of a CEO.” This week, those two themes intersected in a conversation with Daniel Ek, the CEO and co-founder of Swedish music streaming service Spotify.
Spotify is — depending on your personal perspective — either an idealized digital jukebox or, as Radiohead’s Thom Yorke once put it, “the last desperate fart of a dying corpse.” Yorke wasn’t the only musician to hate on Spotify, especially in its earlier years. The Beatles, Pink Floyd, and Taylor Swift famously kept their music off Spotify.
Today, Spotify has roughly 100 million paid subscribers, with another 100 million-plus listening free on an ad-supported model. (But it’s the subscribers that drive 90% of the company’s revenue.) The company went public in 2018; its market cap is now around $25 billion. And the Beatles, Pink Floyd, and Taylor Swift can all be heard on Spotify.
Daniel Ek co-founded Spotify in 2006, at age 23, with Swedish entrepreneur Martin Lorentzon. Ek grew up in Stockholm in a family that prized music. His grandfather was an opera singer; his grandmother was an actress and jazz pianist. Ek himself learned to play guitar around the age of 5; for a time, he thought he might become a full-time musician.
But when Ek was a teenager, broadband internet came to Sweden. (It was part of a national initiative that gave nearly everyone access to fast internet and subsidized computers.) Before long, Ek was spending much of his time on the internet. Then came the launch of Napster, the peer-to-peer file-sharing…
