Did you know that Spotify is the largest music streaming service provider in the world? In this article, you’ll learn about Spotify’s net worth, earnings, shareholders, how it all began, and how it’s going.
How Much is Spotify Worth?
- Founded: April 23, 2006
- Founders: Daniel Ek and Martin Lorentzon
- Industry: Audio streaming, Podcasting
- Net Worth: $46 Billion
- CEO: Daniel Ek
Spotify is a Swedish audio streaming and media services provider founded by Daniel Ek and Martin Lorentzon in 2006. Spotify is the world’s largest music streaming service provider, with over 356 million monthly active users including 158 million paying subscribers.
The company offers digital copyright-restricted recorded music and podcast, with more than 90 million songs from record labels and media companies. Spotify has a presence in most of Europe, America, Oceania, Asia, and more than 40 countries in Africa. The company has its headquarters in Sweden and is legally domiciled in Luxembourg.
Spotify’s services are available on most modern devices including Windows, macOS, Linux computers, iOS, Android smartphones, tablets, and AI-enabled smart speakers such as Amazon Echo and Google Home.
Spotify also pays royalties based on the number of artist streams as a proportion of total songs streamed. The company set aside 70% of its total revenue to rights holders (record labels) who then pay artists based on individual agreements.
How it Started
Spotify was founded in 2006 by Daniel Ek, former CTO of Stardoll, and Martin Lorentzon, co-founder of Tradedoubler. The name of the company was derived from a combination of two words “spot” and “identify”.
The company started by providing over 50 million tracks to consumers with convenient features including offline browsing and playlist saving. At the time, Apple was the only competitor Spotify had. They were able to grow by offering free streaming services and by allowing streaming of sponsored ads as well as a low subscription price.
How it is Going
Spotify opened the free service tier in the United Kingdom in February 2009, however, free registration was halted due to a registration surge following the release of the mobile service. In July 2011, Spotify’s services were introduced in the US with a six-month ad-supported trial period. This afforded users the opportunity to listen to an unlimited amount of music for free.
However, by January 2012, the free trial period was modified and limited users to ten hours of streaming each month and five plays per song. Three months later, Spotify removed all limits on the free service tier indefinitely.
In 2017, Spotify has a major expansion of its United States operations in Lower Manhattan, New York. The company added approximately 1,000 new jobs while retaining 832 already existing positions.
Spotify has acquired so many other music-related companies over the years. In May 2013, the company acquired the music discovery app, Tunigo. In March 2014, Spotify acquired the music intelligence company, The Echo Nest. Spotify announced it had acquired the data consulting firm and analytics company, Seed Scientific in June 2015.
They also acquired Cord Project and Soundwave, a social and messaging startup. Furthermore, in April 2016, they acquired CrowdAlbum, a “startup that collects photos and videos of performances shared on social networks,” and would “enhance the development of products that help artists understand, activate, and monetize their audiences”. The same year, the company acquired Preact, a “cloud-based platform, and service developed for companies that operate on subscription models which help reduce churn and build up their subscriber numbers”.
Other companies acquired by Spotify include Sonalytic, MightyTV, Mediachain, etc. Apart from acquisition, Spotify has also been in partnership with a lot of companies including Sony, Microsoft, ESPN, and Netflix.
Who Owns Shopify?
Spotify Technology S.A is an audio-streaming platform. The company offers its services globally in over 92 countries and territories with about 356 million active subscribers and 158 million paying subscribers as of March 21, 2021. Although the company was founded by Daniel Ek and Martin Lorentzon, the company is part-owned by other stakeholders.
Below are the top individual shareholders of Spotify Technology S.A (SPOT).
1. Daniel G. Ek
Daniel Ek is the co-founder and the highest shareholder of Spotify with about 34.5 million shares representing 18.2% of total shares. As the CEO of the company, he oversaw the company’s initial public offering (IPO) in 2018. The company has since grown to become the leading music-streaming service in the world. Prior to Spotify, he founded an online marketing firm called Advertigo, which he sold to Sweden-based TradeDoubler in 2006. Daniel Ek has an estimated net worth of $4 billion.
2. Martin Lorentzon
Martin Lorentzon is the co-founder and the second-highest shareholder of Spotify with about 22.4 million shares representing 12.7% of total shares. Lorentzon currently serves as Spotify’s vice chairman. Martin is responsible for designing and implementing strategies, budgets, and goals. Prior to Spotify, he had founded TradeDoubler, the company to which Mr Ek sold Advertigo. Lorentzon also served on the board of directors of Telia Company between 2013 and 2018. Martin Lorentzon has an estimated net worth of $5.4 billion.
3. Baillie Gifford & Co.
The third-highest shareholder of Spotify is the investment management firm, Baillie Gifford and Co. The firm owns 21.4 million shares of Spotify with more than $370 billion in assets under management.