Contents
Some battles cannot be won head-on. The harder you push, the more your opponent evades you. The music industry learned this after file-sharing networks emerged. The story of Spotify shows how someone tackled the problem from the side: not through more pressure but through a better position. It is an example of Maneuver.
A battle that could not be won head-on
Situation
Since Napster appeared around 1999, millions of people have been swapping music files for free over the internet. After Napster’s demise, services like Kazaa take over. The music industry responds with lawsuits against file-sharing services and, in some cases, against individual users. CD sales collapse anyway. Daniel Ek, born in Stockholm on February 21, 1983, has his first idea for a new music service around 2002, when Napster shuts down and Kazaa takes over.
Link to the principle
Lawsuits are a frontal attack. They set force against force, law against behavior. Against a behavior that millions of people find convenient, that does little good. If you want to win here, you need a different position.
A founder who knew the other side
Situation
For a short time, Ek is head of µTorrent, a file-sharing program, until it is sold to BitTorrent in December 2006. That same year, he and Martin Lorentzon found Spotify AB in Stockholm. In 2010, Ek told the British newspaper The Daily Telegraph, in essence, that piracy cannot be abolished by law. In a 2012 interview with ABC News, he said he had wanted to build a product that was better than piracy.
Link to the principle
Ek knows the terrain on which the music industry is losing. He knows why people download illegally: because it is fast, simple and free. A maneuver targets exactly the place where the opponent draws its strength and takes away its reason for standing there.
More convenient than piracy
Situation
In October 2008, Spotify launches its legal streaming service in several European countries. You search for a track and hear it immediately, with no file, no waiting and no viruses. There is a free tier with ads and an ad-free subscription. This model is often called freemium.
Link to the principle
Spotify does not fight piracy. It makes it superfluous. The strength of the file-sharing networks, namely convenience and free access, is surpassed or at least matched. The opponent loses its appeal without a single lawsuit having to be filed.
Bringing the labels on board
Situation
A legal service needs licenses. Spotify has to win over the major record labels. Only after signing licensing agreements with them can the service launch. In 2011, the business news agency Bloomberg runs a report on Ek under a headline saying that he is winning over music pirates with the labels’ approval.
Link to the principle
A good maneuver can also shift the front lines. The labels, which had been fighting their own customers, now stand on the same side as Spotify. Ek draws the forces that could have opposed him into his own position.
New fronts
Situation
Success creates new conflicts. Artists complain that a single stream earns only fractions of a cent. Some, including Taylor Swift and Thom Yorke, temporarily withdraw their music. Spotify itself posts losses for many years and does not report its first annual profit until 2024. The business model remains dependent on the record labels’ licensing terms.
Link to the principle
A maneuver solves the problem it was designed for. It does not solve every problem. If you create a new position, you then stand on new terrain with new opponents. There, too, the same rule applies: strength against strength is rarely the best way.
Key takeaways
Key lessons
- Ask yourself why others do what you are fighting.
- Offer something that is better than what you want to prevent.
- Make the other side’s reason superfluous instead of charging against it.
- Bring former opponents into your position where you can.
- Count on every new position bringing new conflicts.
Summary
The music industry fought piracy with lawsuits and lost. Daniel Ek, who knew the world of file sharing from the inside, chose a different path. Starting in 2008, Spotify offered legal access to music that was more convenient than illegal downloads, and in doing so won over the record labels as partners. That is maneuver in business: not defeating the opponent but pulling the ground out from under it.
Sources
- Rupert Neate: Daniel Ek profile: ‘Spotify will be worth tens of billions’. The Daily Telegraph, February 17, 2010.
- Brendan Greeley: Spotify’s Ek Wins Over Music Pirates With Labels’ Approval. Bloomberg, July 14, 2011.
