Spotify is the world’s biggest and most favorite music streaming platform.
The platform currently has an overall user base of 406 million users and around 180 million premium subscribers.
Spotify is available in 180 countries and currently has a market cap of $23.88 billion, which is way bigger than any standalone music streaming platform.
But how did this Swedish music streaming platform suddenly become the talk of the town and capture this massive music industry?
Of course, they worked hard, but just hard work doesn’t make anyone or anything successful.
There are some strategies that Spotify used to become what it is today.
If you also want to know what strategies they used, keep reading this blog post till the end.
3 Key Strategies That Helped Spotify Become The #1 Music Streaming Platform
1. The Freemium Model Masterstroke
The most crucial driving factor of Spotify’s growth is its freemium model.
Since the beginning of Spotify’s operations, Spotify has given its users the choice between the free and premium models.
The users enrolled in the free tier have to listen to ads in between their listening sessions to keep enjoying music on their platform.
When Spotify was launched, the co-founder and one of the owners of Spotify, Daniel EK, knew that people were not used to paying money for music.
Back then, when Spotify didn’t exist, the piracy of music was at its peak, and platforms like Napster were ruling the market with pirated music.
Most people simply did not buy DVDs because buying music seemed like a waste of money for them.
Daniel also knew that if people were not buying DVSs, they wouldn’t care about taking Spotify subscriptions as well.
That’s the reason why Spotify was launched with a free tier plan that attracted a lot of eyeballs and helped it gain much-needed traction in the beginning days.
Deep down, Daniel knew that converting an existing free user into a paying subscriber was much easier than acquiring new customers directly.
The freemium model worked an insanely successful funnel for them and helped them reach new heights quickly.
2. Ease of Use
Do you like a cluttered and messy app?
No one does, right?
Spotify knew that if it wanted to turn its user base into a loyal fanbase, it would have to provide much more than just music.
Back then, in 2008, most of the apps looked like cluttered bedrooms filled with mess all around.
And to stand out from this mess, Spotify made sure that its app and platform were completely user-friendly and looked beautiful.
They put so much effort and resources into creating the best user experience in order to make music listening experience world-class for their users.
3. Incentivising The Music Creators
Before Spotify, the music industry was a mess.
Creators were not getting paid properly for their music by the big music labels.
And music labels were also not making enough money to support music production due to music piracy.
Above all, earlier, the music industry was completely unorganized, and the numbers were not exactly true.
When Spotify launched, they made one thing clear – they wanted to minimize the number of piracy users while properly incentivizing music labels and music creators.
Currently, Spotify pays royalties for each music license for artists and creators. No matter whether the user is listening to music on the premium or the free version, the artists always get royalties for that.
While some articles claim that Spotify gives royalties for each music stream, Spotify made it clear that its royalty system doesn’t work like that.
For a detailed understanding of Spotify’s royalty system, check out this post.
Conclusion
Of course, there are plenty of other things that contributed to the success of Spotify, which we, as an outsider, don’t clearly know.
But from the outside point of view, I think these are some of the most crucial factors that helped Spotify become the #1 music steaming platform in the world surpassing Apple Music and YouTube Music.
