Spotify has 3 million paid subscribers, 20% of active user base

By on January 27, 2012, 11:00 AM

Music streaming service Spotify has reached 3 million paid subscribers across the 12 markets it currently operates in. The figure, revealed at a recent event by chief content officer Ken Parks, means that more than 20% of its "active" user base is paying every month for ad-free unlimited listening or access to the company's song catalog on smartphones -- the ad-free option is $4.99 per month or $9.99 on mobile devices.

The 20% figure is up from 15% in March 2011, and Spotify says that its active users don't include folks who signed up for a free trial of a premium plan but didn't buy a subscription or continue to use the free service afterwards. The company believes that the Facebook integration and month-long free trials for premium subscriptions helped boost its conversion rate, though the service's caps on the amount of free ad-supported listening certainly played their part.

Though initially offering 20 hours of free, ad-supported listening, Spotify changed that to six months unlimited listening for new sign-ups, after which users are restricted to 10 free hours of music per month and five plays per track. The Anglo-Swedish service also recently unveiled support for apps and a revamped Spotify Radio feature on its desktop client, offering customizable streaming audio similar to Pandora.

Spotify played up the fact that half of its paying customers are under 30, which is a remarkable number of people who are generally hard to monetize. It goes to show not only that their model works, but that piracy is more a problem of price and distribution rather than draconian laws and enforcement.

User Comments: 7

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gobbybobby said:

listening to Spotify right now, £5P/M unlimited.

Guest said:

That's what I've been saying all along...the way to reduce piracy is to give people a great service at a great price and people will pay. Spotify is the first music service I have ever paid for...Love it! Now if we could just get the movie industry to do something similar...but they are really greedy so it will take a lot longer time but at some point they will see its better to offer a cheap service than to offer an expensive service and go after pirates...because nobody wins....And they sure aren't making any more money that way .. actually making more people pirate because it's A LOT cheaper and easier. Take spotify as an example...why download mp3's illegally can get almost every song you want legally and great quality...and its a lot easier...that's how you convert pirates to paying customers!! Not by suing

MrTomTom said:

@Guest, correct. I've voiced a similar opinion in another post. Spotify is the easiest way to get music to my ears and it's the business model which looks by galaxies far away, the best alternative to the since long obsolete CD business the RIAA are desperately fighting for.

Guest said:

Spotify requires a FaceBook account to login. So while I would be listening to Spotify right now and paying my monthly fee I am not. Still buying CD's and waiting for something better.

Guest said:

Not true. You can login with a Spotify only account I am doing it right now. You do not have to use Facebook.

Guest said:

That is only the case if you previously had an account prior to them making an FB account mandatory. You can no longer sign up w/o an FB account. Please show me I am wrong as it looks like a great service save for the FB issue.

Guest said:

FB is required - very stupid descision as not all want to be on facebook.

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