From the start, the Swedish company set out to compete with pirate services by offering a better user experience. Now, a decade later, it has come a long way.
The company successfully transformed into a billion-dollar enterprise and is planning to go public with a listing on the New York Stock Exchange. While it hasn’t completely evaporated music piracy, it has converted dozens of millions of people into paying customers.
While Spotify sees itself as a piracy remedy, backed by the major labels, its piracy roots are undeniable.
In a detailed feature, Swedish newspaper Breakit put a spotlight on one of Spotify’s earliest employees, developer Ludvig Strigeus.
With a significant stake in the company, he is about to become a multi-millionaire, one with a noteworthy file-sharing past. It’s unclear what is current stake in Spotify is, but according to Swedish media it’s worth more than a billion Kroner, which is over $100 million.
Strigeus was the one who launched uTorrent in September 2005, when the BitTorrent protocol was still fairly new. Where most BitTorrent clients at the time were bloatware, uTorrent chose a minimalist approach, but with all essential features.
This didn’t go unnoticed. In just a few months, millions of torrent users downloaded the application which quickly became the dominant file-sharing tool.
Little more than a year after its launch the application was acquired by BitTorrent Inc., which still owns it today. While that part of history is commonly known, there’s a step missing.
Strigeus’ coding talent also piqued the interest of Spotify, which reportedly beat BitTorrent Inc. by a few months. Multiple sources confirm that the streaming startup, which had yet to release its service at the time, bought uTorrent in 2006.
While some thought that Spotify was mainly interested in the technology, others see Strigeus as the target.
“Spotify bought μTorrent, but what we really wanted was Ludvig Strigeus,” former Spotify CEO Andreas Ehn told Breakit.
This indeed sounds plausible as Spotify sold uTorrent to BitTorrent Inc. after a few months, keeping the developer on board. Not a bad decision for the latter, as his Spotify stake makes him a billionaire. At the same time, it was an important move for Spotify too.
In addition to having a very talented developer on board, who helped to implement the much needed P2P technology into Spotify, the deal with BitTorrent Inc. brought in cash that funded the development of the tiny, but ambitious, streaming service.
It might be too much to argue that Spotify wouldn’t be where it is without uTorrent and its creator, but their impact on the young company was significant.
The file-sharing angle was also very prominent in the early releases of Spotify. At the time, of all the tracks that were streamed over the Internet by Spotify users, the majority were streamed via P2P connections.
And we haven’t even mentioned that Spotify reportedly used pirate MP3s for its Beta release, including some tracks that were only available on The Pirate Bay.
Spotify’s brief ownership of uTorrent isn’t commonly known, to make an understatement. When BitTorrent Inc. announced that it acquired “uTorrent AB” there was no mention of Spotify, which was still an unknown company at the time.
Times change.
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