Spotify’s Daniel Ek created a free, Facebook-enabled platform that could save the recording industry from piracy–and iTunes.
It’s a typically damp, dark November afternoon in Stockholm, and Daniel Ek is ill. Over the past month the 28-year-old chief executive of Spotify has worn himself down jetting from his Swedish base to San Francisco, New York, Denmark, the Netherlands and France to visit his expanding sales force and launch his music service in one or another of the dozen countries it now operates in.
But there’s no rest for the weary. Next week he’s scheduled to return to New York to unveil Spotify’s new platform in front of his first-ever press conference—a platform that he admits still isn’t ready for a public debut. “I should be home in bed,” sighs Ek, his voice weak and scratchy, “but we need to get this thing perfect.” So the bald, barrel-chested Ek zips his white hoodie to his chin, swaps tea for his morning cup of coffee—the first of six he throws down in a typical day—and heads into an office that resembles a university library during finals. The pool table has been traded for more IKEA desks, and gray daybeds offer a place to nap between all-nighters. Forgoing his large office, which he mostly uses as a meeting room, Ek plops himself down at an open desk. Around him, a dozen engineers from nearly as many countries, united by their geek-chic uniforms—skinny jeans, printed T-shirts and cardigans—frantically bang out code on their silver MacBooks.
All this frenetic energy reflects the strange new reality of the music business. More than New York or L.A. or Nashville, this rented office space along Stockholm’s Birger Jarlsgatan has become the most important place in music, with Ek now standing as the industry’s most important player. Superstar bands like the Red Hot Chili Peppers—formed the year Ek was born—now trek to Sweden to kiss the ring; he sits shotgun in vintage cars with Neil Young (his iPhone boasts a picture of them cruising in a white 1959 Lincoln Continental); he texts breezily with Bono. “Both my (maternal) grandparents were in the music industry,” shrugs Ek, “so I’m fairly grounded about the whole thing.”
The music industry has been waiting more than a decade for Ek. Or more specifically, someone—anyone—who could build something (a) more enticing to consumers than piracy while (b) providing a sustainable revenue model. In the 1990s Shawn Fanning and Sean Parker essentially broke the recording industry with their short-lived illegal download site, Napster, which Ek describes as “the Internet experience that changed me the most.” It was fast and free and limitless—through the site Ek discovered his two favorite bands, the Beatles and Led Zeppelin—and he became one of the 18-to-30-year-olds now considered a lost generation: Those who don’t believe you need to pay for music.
In building his iTunes juggernaut out of the wreckage, Steve Jobs subsequently proved that the cure could be almost as destructive as the disease. By training consumers to buy singles, rather than the CDs that had been the industry’s lifeblood, and taking an outsize cut of the action, Apple stoked the continuing spiral. Recording industry revenue, a healthy $56.7 billion in 1999, according to IbisWorld, clocked in at about $30 billion in 2011.
Enter a third disrupter, Ek. In the current tech landscape, where Google provides the search, Facebook the identity and Amazon the retail, Ek wants Spotify to supply the soundtrack. As he describes it: “We’re bringing music to the party.” Which explains what’s keeping his sleep-addled engineers on a 24-hour cycle: Rather than a mere music player—albeit one with a revolutionary model that allows legal access to almost every song you’ve ever heard of, on demand, for free—Spotify aims to create an entire music ecosystem.