Spotify Saved Music. Can It Save Itself?

Daniel Ek, Spotify Technology SA’s co-founder and chief executive officer, was in a celebratory mood on Feb. 28, the day his streaming music company filed to go public on the New York Stock Exchange. And like any modern CEO with faith in technology to reorganize the world, he celebrated by threatening anyone who stands in his way. Spotify, he wrote to investors, will render record labels and publishers obsolete by connecting artists directly to fans. “The old model favored certain gatekeepers,” he said, but today “artists can produce and release their own music.”

Ek, 35, started Spotify in 2006 because he thought he could stamp out the piracy that had ravaged the music business. He was right. Total global music sales have grown three straight years after a 15-year decline. More than 70 million people now pay Spotify an average of about $5 a month to access 35 million songs, plus playlists and podcasts. In private transactions, investors have valued the company at more than $20 billion, a market cap many analysts expect Spotify to justify when it lists its shares on April 3.