Innovation in the music industry

lördag, 2010 maj 15

All the world’s music anywhere, anytime

Online music streaming

Better than piracy

lördag, 2010 maj 15

lördag, 2010 maj 15

Background

Founded (and funded) summer 2006 by Daniel Ek and Martin Lorentzon

Got going August 2006 with a small tech team mostly from KTH, six people in total

Launched private beta for friends and family in May 2007

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lördag, 2010 maj 15

About 20 people by summer 2008

First external financing round in summer 2008: Northzone and Creandum

Launched publicly in October 2008

About 40 people at launch

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August 2008

lördag, 2010 maj 15

Second external financing round in summer 2009: Wellington and Horizons

Mobile apps released in fall 2009 (first iPhone and Android, then S60)

Over eight million users in six markets

Over eight million songs

Offices in Stockholm, London, New York, Paris, Madrid, Oslo

About 150 people in the company

lördag, 2010 maj 15

Music is ubiquitous and in practice essentially free on the Internet

The music industry’s response – DRM and lawsuits – alienates customers and causes more problems for legitimate users than pirates

The challenge

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The opportunity

Despite music’s being free, the user experience was bad

Accessing music from different places and devices was cumbersome

User’s should be willing to pay – with their attention or their wallet – for something better

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The solution

Move from a distribution model based on ownership to one based on access

Make it ubiquitous

Make it free or significantly better than free alternative to create an incentive to pay

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Conclusions

Fighting what users want is a losing game

“Don’t bet against the Internet”

Identify what’s bad about the current user experience and figure out how to improve it – without losing the good parts

Spend your marketing dollars on product development

lördag, 2010 maj 15