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thanks for watching techwiki click the subscribe button then enable

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notifications with the bell icon so you won't miss any future videos remember

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when we were all flinging songs back and forth across on napster and limewire and

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getting cease and desist letters from some suit at a record label or

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alternatively trying to figure out how many 99-cent songs we could fit into our

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monthly budget and our four gig ipod well much of that changed when spotify

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started offering free internet music streaming in 2009 trying to appeal to

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those who wanted a legal way to listen to their favorite artists without

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spending buckets of money on drm protected tracks and appeal they did

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less than 10 years later spotify now has 170 million active users and a library

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of 35 million songs thanks to licensing deals with three of the biggest rights

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holders in the music industry sony warner and universal and also merlin a

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key agency that represents a large number of smaller more independent

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artists i mean to say things have gone well would be an understatement they're

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even listed on the new york freakin stock exchange and that's a

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big deal but how exactly do they survive by taking something that costs money

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music and giving it away for free okay

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yes yes the obvious answer is advertising hence the guy shouting about

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the sales event at the local car lot when you're just trying to chill out to

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something mellow but they've also featured a premium subscription option

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since 2008 that offers offline listening the ability to choose a specific song on

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mobile and an ad-free experience similar to netflix's video streaming service

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which launched the year before but unlike netflix spotify isn't yet

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profitable although it is making enough to stay afloat okay but how does that

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work well spotify brings in significant revenue from both advertising and

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premium subscriptions but they also spend a great deal on licensing songs

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people actually want to hear around 10 billion dollars so far something that's

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actually been a source of some controversy you see even with these huge

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sums of overall royalty fees the amount of money that goes to the record label

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per playback can seem insultingly small with many rights holders only making

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around three quarters of a cent each time someone listens to one of their tracks leaving only some portion of that

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for the actual artist you can't even say they're making pennies per play in 2014

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the situation escalated to the point that taylor swift very publicly removed

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all of her songs from spotify though in fairness to them at t swift's level of

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fame a solidly performing album could net five or even six figures per month

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so we don't blame you for not feeling too bad for her and radiohead i mean

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i'll feel bad for radiohead they're artists of course spotify's popularity

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isn't only due to its vast song catalog it used to rely on its own servers and

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peer-to-peer connections for content delivery but now much of spotify's

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operations are handled through google cloud similar to how netflix uses amazon

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web services instead of its own servers to process user requests and

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recommendations which you can learn more about up here leveraging a large

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redundant cloud service as well as storing its files in ogg vorbis which is

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not a malicious alien race but a compressed format that takes up less

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space than mp3 while maintaining quality has given spotify a reputation for being

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a fast reliable streaming application at least so far

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until they can figure out how to turn a profit their future will always be in

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question but for now investors see enough potential to continue to fund

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them maybe the plan is to pull a page out of netflix's book and launch their

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own record label cutting out the middleman so both spotify and artists

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could make more money hopefully they'll do this by the time techwiggy's debut album bite me drops

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next year and trust me it's a real

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techwiki and enter techwiki in the how did you hear about a section because

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that's how you heard about it hopefully alrighty like if you liked dislike if

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you didn't to subscribe to techwiki and thanks for watching this video instead

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of all the other ones on youtube because there's there's lots

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i checked