Daniel Ek’s Spotify: Music’s Last Best Hope

By Brendan Greeley

Spotify founder Daniel Ek and Christina Aguilera, photographed in Los Angeles on July 8 Photograph By Art Streiber

(Corrects price of subscription fee in Europe in 10th paragraph)

“You can’t work in music. You have to find another job.”

Per Sundin’s concerned mother was on the phone. It was the summer of 2006, and both Sundins were watching a debate between Sweden’s two major party candidates for Prime Minister. Earlier that year, police in Stockholm had confiscated servers and questioned the founders of The Pirate Bay, a file sharing site that had been ignoring increasingly piqued letters from the American entertainment industry. Media piracy had become a national campaign issue in Sweden, which according to Harvard’s Berkman Center is second only to Japan in speed, price, and availability of broadband Internet access. During the debate, the moderator asked the candidates how they felt about file sharing. Both agreed that piracy was too easy, and that it didn’t make sense to criminalize an entire generation of music lovers.

It had been a bad couple of years for Sundin, who runs Universal Music in Sweden. Revenues consistently fell 10 percent per year. Between 2001 and 2008, he would fire 200 employees. Universal, where he is now, dropped from 110 to 40. He was reluctant to tell people he worked for a record label. At parties he would become angry. He asked friends whether they downloaded, whether their children downloaded. No one had a problem with taking music for personal use. “But that,” he would say, “is what we do!”

Even in bad times, the record business has its perks. To get to Sundin’s office, you pass two stands of fresh lilies, a Warhol-style photo of the My Aim Is True-era Elvis Costello, and a Guns N’ Roses pinball machine. To advance in the music industry, you evidently have to agree to hang a photo of Bruce Springsteen in your office; Sundin’s is as big as his desk and has Clarence in it, too. He tells of a major-label project in 2001 that gave a small group of consumers access to 5,000 albums, along with CD burners and color printers. “We thought you’d always need a CD,” he says. Sundin, to be sure, fought hammer and tongs to punish music piracy, but he seems almost sheepish now. “We went through an evolution,” he says. “The consumers went through a revolution.”

Worldwide revenue for the recording industry peaked in 1999 at $27 billion, according to International Federation of the Phonographic Industry (IFPI). By 2008 it had plummeted to $14 billion. That year, Universal, EMI Music, Sony, Warner, and Merlin, which represents independent music labels, each agreed to an experiment: They would give their entire catalogs to a Swedish startup run by a then-25-year-old with no experience in the music industry. That company, Spotify, entered seven European markets and began giving out invites to listen to 13 million songs, on demand, for free. “We had to try everything,” Sundin says.

At the time, the industry was pressing European countries to write laws in line with a European Union directive to stiffen civil enforcement of intellectual-property rights. Record labels had to win not only in court but also among the public. Sundin saw a demo of Spotify and laid out the case to his bosses in London. “To get legislators on our side,” he explained, “we need services for the kids.” “This can’t be true,” he thought after the demo. “It can’t be this good.”

Daniel Ek is 28 now, just old enough to have seen a slide projector and just young enough that he feels he needs to explain how a slide projector works. He is tall and akimbo-limbed—not overweight, but built like someone who spent his youth in front of a computer. Today’s polo shirt, worn above creatively stressed jeans, is green. Tomorrow’s will be red. A felt hat with ear flaps sits on his desk, a gift from a friend. He wore it once, he says, in an internal meeting. To show he meant business.

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