Daniel Ek: Creating a New Rhythm in the Music Industry

The music industry in the US has come to absorb huge losses in revenues including prospective employment to tens of thousands of individuals because of piracy. The Recording Industry Association of America (RIAA) says that the volume of illegally acquired music and the subsequent revenue losses are staggering. From a study by the Institute of Policy Innovation, the losses are estimated at around $12.5 billion yearly in the US economy including 70,000 lost jobs and $2 billion of would-have-been wages to American workers.

While the music industry is seemingly grim, the online music player Spotify has come to emerge as the unlikely champion that might defeat piracy. Spotify allows users instant access to millions of music tracks in a legal manner.

In 2008, Spotify founder Daniel Ek began his campaign to lift the music industry out of dismal slide of revenue losses. Ek says that to win over piracy, any music service must make sure that it is more convenient: as if you are just opening an email account and then, viola!, instant access to 15 million songs.

In Sweden, where Spotify is headquartered, sales from downloads grew by as much as 28 percent the year Spotify launched its music service. Music streaming is estimated to earn 60 percent of Sweden’s $38 million dollar digital income. Moreover, businessmen in the music industry, in hushed, private admissions, say that Spotify practically account for all the revenues from music streaming.

The achievement of Ek is enormous considering that his business was able to thrive in a country infamous for lingering piracy issues. Yet, in 2011, Sweden’s music industry is touted to post its first ever positive growth since the Clinton Administration. Spotify is expected to contribute about 50% of the country’s overall sales. Under Ek’s command, Spotify is gearing for its launch in America, slowly but surely giving music lovers an opportunity to enjoy music—legally.