Background to the Spotify success story

1. Spotify – how it all
started
DevCon 2010
Andreas Ehn
ehn@a8n.se
Twitter: @ehn
CC0 and in the public domain to the extent possible

2. Spotify
All the world’s music anywhere, anytime
Online music streaming
Better than piracy

4. Background
Founded spring 2006 by Daniel Ek and Martin
Lorentzon
Got going August 2006 with a small tech team mostly
from KTH, six people in total
Launched private beta for friends and family in May
2007

6. About 20 people by summer 2008
First external financing round in summer 2008:
Northzone and Creandum
Launched publicly in October 2008
About 40 people at launch

7. August 2008

8. Second external financing round in summer 2009:
Wellington and Horizons
Mobile apps released in fall 2009 (first iPhone and
Android, then S60)

9. Almost 10 million users in seven markets
9.5 million songs
Offices in Stockholm, Oslo, London, New York, Paris,
Madrid, Amsterdam
About 220 people in the company

10. The challenge
Music is ubiquitous and in practice essentially free on
the Internet
The music industry’s response – DRM and lawsuits –
alienates customers and causes more problems for
legitimate users than pirates

11. The opportunity
Despite music’s being free, the user experience was
bad
Accessing music from different places and devices was
cumbersome
User’s should be willing to pay – with their attention or
their wallet – for something better

12. The solution
Move from a distribution model based on ownership to
one based on access
Make it ubiquitous
Make it free or significantly better than free alternative
to create an incentive to pay

13. Scalable backend
P2P
Internet
client client client
Spotify
protocol
access access
point point
Spotify
backend
mostly
HTTP
user user tracker search storage
service state
selection of backend services (some are
independent; other have interdependencies)

14. Instant playback

15. Efficient distribution

16. Conclusions
Fighting what users want is a losing game
“Don’t bet against the Internet” – Google’s CEO Eric
Schmidt
Identify what’s bad about the current user experience
and figure out how to improve it – without losing the
good parts
Spend your marketing dollars on product development

17. Thanks!
Andreas Ehn <ehn@a8n.se>
Twitter: @ehn
CC0 and in the public domain to the extent possible
(photos, screen shots, trademarks and logos owned by
Spotify of course)