Free You Only Have to Be Right Once by Randall Lane

nearly as many countries, united by their geek-chic uniforms—skinny jeans, printed T-shirts, and cardigans—frantically banged out code on their silver MacBooks.
    All this frenetic energy reflected 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 had become the most important place in music, with Ek standing as the industry’s most important player. Superstar bands like the Red Hot Chili Peppers—formed the year Ek was born—now trekked to Sweden to kiss the ring; his iPhone boasted a picture of himself cruising with Neil Young in a white 1959 Lincoln Continental; his texts were filled with breezy messages from Bono. “Both my [maternal] grandparents were in the music industry,” shrugged Ek, “so I’m fairly grounded about the whole thing.”
    The music industry had 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 eighteen-to-thirty-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 downward 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 tech landscape, where Google provided the search, Facebook the identity, and Amazon the retail, Ek wanted Spotify to supply the soundtrack. As he described it: “We’re bringing music to the party.” Which explains what’s keeping his sleep-addled engineers on a twenty-four-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 aimed to create an entire music ecosystem.
    For a consumer, Spotify is an easy sell: The service’s 24 million active users (people who have listened in the past month, as of mid-2014) have access to more than 20 million songs on their desktops, all for the cost of hearing an occasional advertisement. It has the speed and ease of iTunes, the flexibility and breadth of Napster, and the attractive pricing of online radio service Pandora. And unlike those predecessors, Spotify has been social from the start, with tools that let you share playlists with pals—more than one billion songs were swapped via Facebook in its very first month on the social network.
    After he was bounced as Facebook’s first president, Sean Parker begged Ek to let him invest: “Ever since Napster I’ve dreamt of building a product similar to Spotify,” his introductory e-mail read. The service impressed Mark Zuckerberg, too. “I checked it out and I thought, This is pretty amazing,” the Facebook founder told me. “They internalized a lot of what we’ve talked about in terms of social design of apps.” That means turning the core product—in Ek’s case, a hard-fought song library—loose on third-party app developers to help Spotify evolve, making it even more tempting to potential customers.
    Here’s how that social stickiness translates