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𝗛𝗼𝘄 𝗦𝗽𝗼𝘁𝗶𝗳𝘆 𝗪𝗲𝗻𝘁 𝗙𝗿𝗼𝗺 $𝟬 𝘁𝗼 𝗮 $𝟭𝟮𝟲 𝗕𝗶𝗹𝗹𝗶𝗼𝗻 𝗘𝗺𝗽𝗶𝗿𝗲 Spotify broke every business rule. It 𝐥𝐨𝐬𝐭 𝐦𝐨𝐧𝐞𝐲 𝐟𝐨𝐫 𝟏𝟕 𝐲𝐞𝐚𝐫𝐬. Paid $𝟒𝟖 𝐛𝐢𝐥𝐥𝐢𝐨𝐧+ to record labels. Faced 𝐜𝐨𝐧𝐬𝐭𝐚𝐧𝐭 𝐥𝐚𝐰𝐬𝐮𝐢𝐭𝐬 from artists. Yet today, it dominates music with 𝟔𝟕𝟓 𝐦𝐢𝐥𝐥𝐢𝐨𝐧 𝐮𝐬𝐞𝐫𝐬 𝐚𝐧𝐝 $𝟏.𝟏𝟕 𝐛𝐢𝐥𝐥𝐢𝐨𝐧 𝐢𝐧 𝐩𝐫𝐨𝐟𝐢𝐭. Here’s how it pulled off the impossible. 𝟮𝟬𝟬𝟲: 𝗧𝗵𝗲 𝗠𝘂𝘀𝗶𝗰 𝗜𝗻𝗱𝘂𝘀𝘁𝗿𝘆 𝗪𝗮𝘀 𝗗𝘆𝗶𝗻𝗴 Piracy was everywhere. Napster was gone, but people were downloading music illegally through Kazaa and Limewire. The music industry was collapsing—𝐫𝐞𝐯𝐞𝐧𝐮𝐞 𝐝𝐫𝐨𝐩𝐩𝐞𝐝 𝐟𝐫𝐨𝐦 $𝟏𝟒.𝟔𝐁 𝐭𝐨 $𝟔.𝟑𝐁. Everyone thought the business was dead. 𝐃𝐚𝐧𝐢𝐞𝐥 𝐄𝐤 𝐬𝐚𝐰 𝐚𝐧 𝐨𝐩𝐩𝐨𝐫𝐭𝐮𝐧𝐢𝐭𝐲. 𝟮𝟬𝟬𝟴: 𝗔 𝗖𝗿𝗮𝘇𝘆 𝗜𝗱𝗲𝗮 Spotify’s pitch sounded impossible: 𝐓𝐮𝐫𝐧 𝐦𝐮𝐬𝐢𝐜 𝐩𝐢𝐫𝐚𝐭𝐞𝐬 𝐢𝐧𝐭𝐨 𝐩𝐚𝐲𝐢𝐧𝐠 𝐮𝐬𝐞𝐫𝐬. 𝐏𝐚𝐲 𝐚𝐫𝐭𝐢𝐬𝐭𝐬 𝐟𝐨𝐫 𝐞𝐯𝐞𝐫𝐲 𝐬𝐨𝐧𝐠 𝐩𝐥𝐚𝐲𝐞𝐝. 𝐌𝐚𝐤𝐞 𝐦𝐮𝐬𝐢𝐜 𝐚𝐯𝐚𝐢𝐥𝐚𝐛𝐥𝐞 𝐚𝐧𝐲𝐰𝐡𝐞𝐫𝐞, 𝐚𝐧𝐲𝐭𝐢𝐦𝐞. The record labels 𝐥𝐚𝐮𝐠𝐡𝐞𝐝—then made a tough demand: Spotify had to give them 𝟕𝟎% 𝐨𝐟 𝐚𝐥𝐥 𝐫𝐞𝐯𝐞𝐧𝐮𝐞. For every $𝟏𝟎 𝐬𝐮𝐛𝐬𝐜𝐫𝐢𝐩𝐭𝐢𝐨𝐧: $𝟕 𝐰𝐞𝐧𝐭 𝐭𝐨 𝐥𝐚𝐛𝐞𝐥𝐬. $𝟑 𝐬𝐭𝐚𝐲𝐞𝐝 𝐰𝐢𝐭𝐡 𝐒𝐩𝐨𝐭𝐢𝐟𝐲. Most would have quit. 𝐄𝐤 𝐝𝐨𝐮𝐛𝐥𝐞𝐝 𝐝𝐨𝐰𝐧. 𝟮𝟬𝟬𝟵-𝟮𝟬𝟭𝟱: 𝗘𝘅𝗽𝗹𝗼𝘀𝗶𝘃𝗲 𝗚𝗿𝗼𝘄𝘁𝗵, 𝗛𝘂𝗴𝗲 𝗟𝗼𝘀𝘀𝗲𝘀 Spotify grew fast, but at a high price. 𝟐𝟎𝟏𝟎: Users streamed 𝟗𝟐 𝐬𝐨𝐧𝐠𝐬 𝐚 𝐝𝐚𝐲. 𝟐𝟎𝟏𝟏: A Facebook partnership 𝐬𝐮𝐩𝐞𝐫𝐜𝐡𝐚𝐫𝐠𝐞𝐝 𝐠𝐫𝐨𝐰𝐭𝐡. 𝟐𝟎𝟏𝟒: $5 student plans 𝐡𝐨𝐨𝐤𝐞𝐝 𝐲𝐨𝐮𝐧𝐠 𝐮𝐬𝐞𝐫𝐬. 𝟐𝟎𝟏𝟔: Family plans 𝐛𝐫𝐨𝐮𝐠𝐡𝐭 𝐢𝐧 𝐦𝐢𝐥𝐥𝐢𝐨𝐧𝐬 𝐦𝐨𝐫𝐞. But with every new user, Spotify 𝐥𝐨𝐬𝐭 𝐦𝐨𝐫𝐞 𝐦𝐨𝐧𝐞𝐲. Between 2015-2023, it 𝐛𝐮𝐫𝐧𝐞𝐝 $𝟑 𝐛𝐢𝐥𝐥𝐢𝐨𝐧. Labels wanted 𝐡𝐢𝐠𝐡𝐞𝐫 𝐩𝐚𝐲𝐨𝐮𝐭𝐬. Artists called it 𝐮𝐧𝐟𝐚𝐢𝐫. But by then, Spotify was 𝐭𝐨𝐨 𝐛𝐢𝐠 𝐭𝐨 𝐟𝐚𝐢𝐥. 𝟮𝟬𝟮𝟰: 𝗧𝗵𝗲 𝗧𝘂𝗿𝗻𝗶𝗻𝗴 𝗣𝗼𝗶𝗻𝘁 After 17 years of losses, Spotify 𝐟𝐢𝐧𝐚𝐥𝐥𝐲 𝐦𝐚𝐝𝐞 𝐚 𝐩𝐫𝐨𝐟𝐢𝐭: •𝟔𝟕𝟓 𝐦𝐢𝐥𝐥𝐢𝐨𝐧 𝐮𝐬𝐞𝐫𝐬. •$𝟏.𝟏𝟕 𝐛𝐢𝐥𝐥𝐢𝐨𝐧 𝐢𝐧 𝐩𝐫𝐨𝐟𝐢𝐭. •𝟑𝟏% 𝐨𝐟 𝐚𝐥𝐥 𝐦𝐮𝐬𝐢𝐜 𝐬𝐭𝐫𝐞𝐚𝐦𝐢𝐧𝐠 𝐰𝐨𝐫𝐥𝐝𝐰𝐢𝐝𝐞. It now pays artists more than CDs, vinyl, and downloads ever did. The industry that once 𝐟𝐨𝐮𝐠𝐡𝐭 Spotify now 𝐫𝐞𝐥𝐢𝐞𝐬 𝐨𝐧 𝐢𝐭. 𝗧𝗵𝗲 𝗦𝗲𝗰𝗿𝗲𝘁 𝘁𝗼 𝗦𝗽𝗼𝘁𝗶𝗳𝘆’𝘀 𝗦𝘂𝗰𝗰𝗲𝘀𝘀 𝐅𝐫𝐞𝐞𝐦𝐢𝐮𝐦 𝐌𝐨𝐝𝐞𝐥 – Free music with ads, premium for an ad-free experience. 𝐈𝐧𝐬𝐭𝐚𝐧𝐭 𝐒𝐭𝐫𝐞𝐚𝐦𝐢𝐧𝐠 – No buffering, no downloads, just play. 𝐒𝐦𝐚𝐫𝐭 𝐏𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩𝐬 – Instead of fighting record labels, it worked with them. Spotify didn’t just change music. It 𝐜𝐡𝐚𝐧𝐠𝐞𝐝 𝐡𝐨𝐰 𝐭𝐡𝐞 𝐰𝐨𝐫𝐥𝐝 𝐥𝐢𝐬𝐭𝐞𝐧𝐬. I hope you've found this helpful. Follow Vishu Bheda for more such amazing detailed business posts!