Sources: Spotify Has 600,000 US Subscribers; Frustratingly Low Conversion Rates…

Rhapsody has a million subscribers in the US, but it took ten years and a major acquisition to get there.  So what’s wrong with 600,000 US-based subscribers after nine months for Spotify, as reported by sources to the New York Post?

“Since last June, Spotify has signed up 3 million US subscribers. About 20 percent — or 600,000 — pay for the service.”

― The Post’s Claire Atkinson, based on source information.

One problem is that there’s $200 million-plus already sunk into this (and probably more ahead), plus a Facebook integration that melts the face of nearly every competitor.  Which means there’s intense pressure from investors to ramp up – right now, and very quickly.

“The question is, how sticky is Spotify? Is it able to hold on to users for more than a year?” one source said.  “The free people are not signing up for a long period of time, or at the highest pricing tier, or they’re not renewing.”

But wait, there’s more. Because this conversion figure of 20 percent may be drastically high.  Just recently, Eliot van Buskirk of found 17.5 million Spotify app users on Facebook alone, a figure that is completely different than the 10 million active userbase figure offered by Spotify.

And keep in mind, those are just the ones that are linking their Facebook accounts. “Why would Spotify want to seem like it has fewer users than it might actually have?  Don’t all companies want to seem like they have as many users as possible?” Buskirk poses.  “A source who works for a competing service suggested that Spotify might want to appear as if it is converting a higher percentage of free users to the paid version.”

Separately, in conversations with Digital Music News, Spotify has been frustratingly opaque on its total userbase number – active or otherwise.  Other estimates and figures have blown past 10 million, yet Spotify refuses to up that figure.  And, just as suspiciously, has refused to disclose any US-based subscriber or user numbers.

Would you invest another $100+ million on that?

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