Spotify CEO Daniel Ek outlined the company's impressive growth and announced major expansion plans during the "Stream On" event, just ahead of UK Parliament's inquiry into streaming economics. Here are the key takeaways:
- Market expansion: Spotify is launching in 85 new markets and adding 36 new languages, making the service available to more than a billion additional people worldwide.
- Creator growth: The platform has grown from 3 million creators in 2018 to 8 million by the end of 2020, with Ek projecting this could reach 50 million creators serving a billion users by 2025.
- Revenue: Spotify paid out $5 billion to creators in 2020, up dramatically from approximately half a million dollars in 2008 when the service launched.
- Industry revival: While the global music industry contracted to $14 billion in 2014, it grew to over $20 billion by 2019, with streaming accounting for $11.4 billion (more than half) of that revenue.
- New features: Upcoming offerings include expanded promotional tools for artists, new monetisation features for podcasters, WordPress integration, interactive podcast elements, increased personalisation, and the long-awaited introduction of higher quality audio.
- Digital expansion: In 2002, only 8,000 albums (out of 30,000 released in the US) sold more than 1,000 copies, representing 98% of sales. By comparison, in 2020, Spotify saw 1.8 million albums released in the US, with approximately 48,000 albums (six times more than in 2002) accounting for 98% of streams, demonstrating how digital platforms have potentially widened market access for creators.
Later today Spotify’s Chief Legal Officer Horacio Gutierrez will face questions from MPs as the UK Parliament’s inquiry into the economics of streaming ploughs on. But yesterday top man Daniel Ek got in early with a big old defence of his company and its role in the modern music industry, kickstarting a session in which a splurge of announcements were made about new and upcoming Spotify products and projects.
After some waffle about how much he bloody well loves music – and a sneaky employment of the “piracy was killing the music industry, we saved it” cliché – Ek pulled out plenty of stats from his big old stats bag during a speech that opened an event Spotify called Stream On.
“Back in 2002, just over 30,000 albums were released in the US, and only 8000 sold more than 1000 copies, representing 98% of sales of new releases”, he mused. “By comparison, in 2020, 1.8 million albums were released on Spotify in the US, and six times as many albums represented 98% of the streams for these releases”.