Users would upload their copies of the music and spotify would replay them. This was obvious to early users, even if they were only consumers, because of the pirate-shout-out-overlays that were in a lot of the poorer quality releases.
Another interesting note, in the early days of spotify, the app would saturate your upload bandwidth while using it. Given their close ties to utorrent, I always assumed that's how they were affording the bandwidth as well.
Pretty brilliant way to bootstrap I guess; they didn't have to pay for bandwidth or content until they already had contracts in place
Afaik, the trick was to stream (via http, I assume) the first few hundred kilobytes or so from fast/expensive servers and then try to p2p the rest in some clever order. I guess seeking also triggered the fast/expensive path for a while.
Another interesting note, in the early days of spotify, the app would saturate your upload bandwidth while using it. Given their close ties to utorrent, I always assumed that's how they were affording the bandwidth as well.
Pretty brilliant way to bootstrap I guess; they didn't have to pay for bandwidth or content until they already had contracts in place