6. Discuss possible modifications to Spotify’s revenue model to make the company more profitable while respecting its values (i.e. remain a low-cost music provider, pay musicians, maintain on-demand access, etc.). In 2006, two Swedish serial entrepreneurs – Daniel Ek and Martin Lorentzon – founded Spotify, a European-based, ondemand music streaming service (Spotify, 2013). The founders recognised the gap in the existing market and developed a service to meet customer needs. Spotify combined the existing business models of online radio and the on-demand features of Apple’s iTunes Store. The creation allows the listener to stream music and podcasts, and create custom playlists of their favourite songs through Spotify’s user interface, rather than purchasing individual songs or albums. As a result, the listener is in complete control of the online listening experience.

To develop Spotify, Ek and Lorentzon considered the resources needed to succeed in such a venture.

Historically, the online music format struggled to gain legal rights to the music from record labels. Spotify partnered with record companies and several became co-owners in the start-up, which allowed the service to launch (in 2008)

with a huge library of songs on day one. In 2013 its website boasted that 20,000 songs were added daily, and by 2019 more than 30 million tracks were available.