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Why Spotify Struggles to Make Money From Music Streaming
Despite being the world’s largest music streaming platform, Spotify has struggled financially
Spotify is the world’s most popular music streaming service, outperforming major competitors like Apple Music and YouTube Music, offering access to over 70 million songs to its .
As it operates on a freemium model, Spotify allows its users to listen to music for free with ad breaks every 15 minutes or without ads for a monthly fee.
Spotify was founded in 2006 in Sweden by Daniel Ek and Martin Lorentzon, who wanted to create a legal alternative to online music piracy that was common at the time.
After much negotiation, Daniel and Martin convinced the major record labels to license their music catalogs to Spotify in exchange for a share of their revenues and company equity.
Despite being the king of music streaming, Spotify has never had a profitable year, accumulating . In 2023, it laid off 2,300 employees — more than 20% of its workforce — to cut costs.
For a company that has revolutionized the music industry and changed how we listen to music, one would expect…
