Daniel Ek (Spotify Founder) explains how Spotify got its name.

This again takes us back to my flat that I had out in the suburbs of Stockholm. Martin and I were sitting in different rooms shouting ideas back and forth of company names. We were even using jargon generators and stuff. Out of the blue Martin shouted a name that I misheard as Spotify.

I immediately googled the name and realized there were no Google hits for the word at all. A few minutes later we registered the domain names and off we went.

We were a bit embarrassed to admit that’s how the name came up so our afterconstruction was to say that Spotify stems from SPOT and IDENTIFY.