From Napster's Music Piracy to Spotify

Introduction

Before there was Apple Music, Pandora, Spotify, and many of the streaming platforms that people have grown to love (or hate), there was a growing usage of platforms like Napster and LimeWire. These platforms allowed people to listen and download music for free, but illegally - so that was a kind of music piracy. However, over time with the innovation and introduction of platforms like Spotify, its new business model and technology led to the decline of these illegal platforms. This report will explore the past, present, and potential future of Spotify to determine if there will still be a place for it in the future.

From Napster's Music Piracy to Spotify

Though Spotify is beloved by many of its subscribers for its great platform using advanced technologies to personalize its user experience with its algorithm, it also faces criticism for flaws in its business model by other participants such as artists. In “Saving the Spotify Revolution: Recalibrating the Power Imbalance in Digital Copyright" in The Journal of Law, Technology and the Internet, it states, "Artists began growing suspicious of the service after receiving microscopic royalty checks. Though artists have urged it to divulge how it calculates royalties, Spotify has been far from forthcoming with artists about its financial flows, giving artists all the more reason to distrust the service. Left in the dark, artists must make a seemingly lose-lose choice: stay on Spotify and collect minuscule royalties, or leave the service, forgoing Spotify revenue and exposure. Many musicians have chosen the latter, abandoning Spotify" (Jones, 2020). Therefore, if artists are dissatisfied with compensation and service provided by Spotify, it can become a problem later down the line as artists begin to pull their music from the streaming platform, like how Taylor Swift removed her music from Spotify in 2014 because of the bad royalties. Spotify needs the artists’ music in order to remain in competition with other platforms like Apple Music that compensate artists better per stream.

Innovation and Competition

They need to be innovative, which the company has already begun working on in the past couple of years. In Forbes, an article states, “Google, Amazon Are Why Spotify Needs Its Own Speaker,” it states, “Spotify is working on its own hardware. Press reports from as far back as April 2017 have pointed to job postings on the Swedish music service’s site, seeking hardware and manufacturing experts to build its ‘first physical products’” (Smith, 2018). This move indicates Spotify's intent to expand beyond software and strengthen its ecosystem by integrating more seamlessly with the hardware that listeners use daily. It reflects the growing trend among tech companies to offer a complete package of software and hardware solutions to lock in consumers within their ecosystem.

Conclusion

Overall, from its inception, Spotify had a very promising future because the issues with piracy gave opportunity for its cutting-edge machine learning technology. It is this cutting-edge technology that has made it one of today’s leading streaming platforms. However, its future is still questionable due to the oversaturation of the streaming industry, its conflict with artist compensation, and increasing cost of licensing with record labels. There’s also the increasing cost that people have to pay in order to access these platforms, which is going to make companies like Spotify plummet in the future because piracy will increase again, despite efforts and better technology that is available to shut sites down for copyright infringement. The balance between providing value to both consumers and artists will be crucial for Spotify to maintain its position in the market.

References

1. Jones, A. (2020). Saving the Spotify Revolution: Recalibrating the Power Imbalance in Digital Copyright. The Journal of Law, Technology and the Internet.
2. Smith, J. (2018). Google, Amazon Are Why Spotify Needs Its Own Speaker. Forbes.