Spotify to Add a Third More Staff as Music Service Grows

Spotify Ltd., the music-streaming service that’s tackling criticisms from artists such as Taylor Swift, said the recent backlash won’t deter its ambition to keep up growth and broaden its reach.

The service, with more than 50 million users, plans to increase its workforce by about 500 to a total of 2,000 as it improves software and expands into new countries, Martin Lorentzon, co-founder and chairman, said yesterday at the Slush startup event in Helsinki. Paid subscriptions have risen to 12.5 million from 10 million in May.

“Spotify is growing so fast,” Lorentzon, 45, said in an interview. “We’re expanding our New York and Stockholm offices to better take advantage of the potential in the market.” The U.S. is Spotify’s biggest and fastest-growing market and “there’s so much to do there.”

Spotify offers a free service with advertising or paid subscriptions without spots, providing an alternative for music lovers who might download songs illegally. Some artists, such as Taylor Swift, aren’t convinced that this model gives them enough income. She has criticized streaming as a cause of declining album sales and pulled her records from the service this month.

Spotify’s Chief Executive Officer Daniel Ek said last week in a blog post that he was “frustrated” that artists feel they aren’t getting enough money from the music service, even as Stockholm-based Spotify has paid more than $2 billion in royalties since starting in 2008. He said artists need to speak with their recording labels.

‘Enormous Challenge’

“I support Daniel’s blog and the frustration comes from us really trying to help the music industry,” Lorentzon said, adding it’s an “enormous challenge” to get society to talk more about respecting copyright laws and pirating artists’ property.

Spotify is seeking to beat rivals to new territories and offers both a free advertising-supported service on computers and a $9.99 monthly ad-free plan on mobile phones and other devices. Spotify’s user base has doubled in the past year as the company expands in new countries.

Lorentzon said he would like to work more closely with Apple Inc. and Google Inc. to improve the Spotify user experience. Priorities include updating the app, expanding beyond the current 58 countries, and developing the software to strike more deals like the Uber Technologies Inc. agreement announced this week to let cab customers choose music played on the move, he said.

The Spotify co-founder said there are no plans for an initial public offering or a sale of the company, adding he and Ek are committed to expanding the service for years to come.

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