So it turns out that despite all the heady optimism surrounding streaming services, adding subscribers is actually pretty difficult. In fact, getting non-paying free users to simply stick around also turns out to be really hard – and we’re talking about free stuff here.
According to industry analyst Mark Mulligan, this is the reason why Spotify churns through nearly two million subscribers just to get 400,000 to stick around (in any capacity), and why Rhapsody is treading water on their subscriber levels. It also may help to explain why Deezer has an inactive, zombie ‘userbase’ of approximately 20 million. These are registered accounts, that are never getting logged into.
Here’s the side-by-side comparison of Spotify and Deezer, and presented by Mulligan at a recent symposium at SXSW.
I remember creating a deezer accout to check it out when it first arrived. Then Spotify turned up and for various reasons that was a better choice for me. So I am one of the inactive accounts in question at deezer. BUT, I am also a paying Spotify & WIMP user. It does not follow that the inactive accounts at deezer represent users not wanting streaming as a service. They could just as well be users active elsewhere.
That’s why my royalty statements are filled with Spotify streams and just a few Deezer streams. Deezer rate per stream is higher though, but in the end…
Does the nature of both products influences this?
Deezer is browser based, whereas Spotify is software that you have to install- and launches automatically at boot. This probably counts as an ‘active’ user, even if the software is just open in the background/no listening?
I have noticed that.
I have a free spotify account. Before, I had to start the program, now it launches at boot.
If they are telling investors that that is active use then….
They don’t report active users just if the app launches at boot. An active user according to Spotify’s widely publicised stats is someone who has streamed at least once within the past month
An interesting piece but generally accepted with similar services where people sign up and don’t use it. Good to see Spotify does have an active userbase, even it’s free.
Mark at Beatsuite.com Music Library
the reason for zombie accounts is that users are constantly creating new “free” accounts so they never have to pay anything.
when the promotion of free music runs out, the user just creates a new account and never returns to the old account.
Not anymore. In most countries you can now use Deezer for free
They need to set an account deletition policy if they have not already.
It makes business sense.
However, a lot of on-line consumers like to think they are anonymously using software. It creates a creepy feeling in that consumer’s mind when they get the email that starts “We’ve noticed that you haven’t been using your accoun