Daniel Ek once told the Financial Times that “you don’t start a music company if you think you’re going to be filthy rich”. But it happened anyway. Ek, who founded the music-streaming platform Spotify in 2006 – while working as a software engineer in a “small makeshift office” in Stockholm – took five years to convince American music executives to allow him to launch in the US. The move transformed the business. Today, the Spotify co-founder is worth $8.3 billion, according to Bloomberg. But now he is stepping down as CEO at the grand old age of 43.
“Media successions are often full of drama and boardroom intrigue,” says the FT. Spotify’s is reassuringly boring. Ek will be replaced by two longtime lieutenants, Alex Norström and Gustav Söderström, described by one major record label executive as “kind of like clones of him”.
By installing loyal deputies, Daniel Ek will retain his grip on the company he has defined for two decades. A former Spotify executive notes that “culturally” the $100 billion company is “always going to be very Swedish and going to be run by Swedes”.
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Still, the change marks the end of an era during which Daniel Ek revolutionised the music business. “Taking on Apple, Amazon and Google, tech giants many times the size of Spotify, he won the battle for dominance of the music streaming market.”
Spotify’s breakthrough was to take a bet on “a controversial idea”, says Fortune – “that people wouldn’t mind not owning the music they listened to if it meant easy access to a seemingly unlimited catalogue of songs and albums”.
Online music then was dominated by Apple’s paid iTunes service and plagued by piracy sites. “The only way to solve the problem,” Ek told The Telegraph in 2010, was to create something “better than piracy” that also “compensates the music industry”.
Plenty of artists have been critical of the model he devised. The Icelandic singer Björk called Spotify “probably the worst thing that has happened to musicians”. And Taylor Swift famously pulled her catalogue from the platform, prompting Ek to take many trips to Nashville to coax her back, reports the FT. Most eventually return to the fold.
How Daniel Ek became a millionaire overnight
Daniel Ek grew up in Rågsved, a working-class suburb of Stockholm, obsessed with music and computers. He got his first guitar at four and his first computer at five. By the age of 14, he was running a business building websites and, at 16, was “earning more than his parents”. He taught himself English by watching MTV, acquiring a Swedish-American accent.
Rejected for a job at Google because he didn’t have a degree, “he decided to compete with it instead” – founding Advertigo, an online marketing company that he sold in 2006, “becoming a millionaire overnight”. He ploughed the cash into Spotify, which went public in 2018. Its stock is up by 310% since then, buoyed by Ek’s timely push into podcasts.
Having taken a step back at Spotify, he’s free to pursue new projects. The most eye-catching, says The New York Times, is Neko Health, a body-scanning service that has “ridden its early success in Europe to attract a star-studded group of investors”, who have valued it at around $7 billion. When Neko opened its New York clinic in September “more than 50,000 New Yorkers joined the wait list” for a $499 AI-powered scan, notes Quartz. Ultimately, Ek reckons that getting a full bells-and-whistles scan could be as quick and easy as walking into an airport security screener.
One of his more controversial recent investments is in Helsing – a German defence AI company – which has drawn a backlash from some artists and Spotify users. Ek has shrugged off accusations of funding “war machines”. Meanwhile, he remains executive chair of Spotify. “After 20 years, he is betting that staying in the background will let him stay in control.”
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