(Napster was later acquired by Best Buy, then went to Rhapsody. Rights issues for the most part prevented easy access, but they've long since been resolved. In the iPod and then smartphone era, Rhapsody and the revived, legal Napster struggled to satisfy consumers who wanted to play their subscription songs on mobile devices. 'It paid off.'īefore Spotify, early music services such as Rhapsody focused on listening via the computer. 'Spotify sacrificed quality for immediacy,' Cohen says. There was also a tech innovation: When music fans clicked play to hear a free song on Spotify (via Facebook), the first 15 seconds were streamed at a lower bit rate, so that it would play immediately, instead of waiting for 'buffering.' The bit rate was improved once the song continued. Spotify was 'front and center to millions of Facebook users who could see what their friends were listening to in real time,' says Ted Cohen, managing director of Tag Strategic, music industry consultants. Facebook was such an important early partner that Spotify housed several of its engineers at Facebook headquarters in Menlo Park, Calif. The service started slowly, focusing on Sweden and then Europe. 'At the time, they thought I was crazy,' Ek says.ĮMI was the first label to sign on, and Sony, Warner and Universal quickly joined in. The twist: He'd offer advertising support. Ek was all of 24 when he began knocking on record-label doors with a seemingly nutty idea: Give him access to their music and let him offer it for free, like Napster did. He decided to follow his passion to create a music start-up with Martin Lorentzon, whose Sweden-based TradeDoubler online ad firm acquired Ek's Advertigo in 2006.

He created code for a Swedish online ad network and got paid $2 million for his efforts.

By 2017, the firm sees CDs falling to $9.5 billion, while digital grows to $6.7 billion.Ī computer whiz since his teen years, Ek was a multimillionaire by age 23. Some $13.7 billion worth of CDs and other packaged music products sold in 2012, compared with $4.9 billion for digital downloads and subscriptions worldwide, according to researcher Strategy Analytics. The music labels persuaded courts to shut Napster down, then watched in horror as CD sales dropped 50% in the last decade anyway.

Spotify co founder